How is your Landlord-tenant relationship?

How is your Landlord-tenant relationship?Zubin Firozi

High demand for rental properties in Dubai can cause tense relationships between landlords and tenants and it is important that both parties are aware of their rights regarding tenancies. Both sides need to arm themselves with facts and try to maintain open dialogue, so disagreements can be resolved.

Rents and sales prices soared in the emirate last year, leading many landlords to want to capitalise on investments, which had previously performed poorly by selling or imposing rent increases. Law 43 of 2013 legally allows rents to be increased by up to 20 per cent, depending on the government's rent index calculator. The Dubai Land Department (DLD) calculates the rent index based on information from contracts registered through Ejari as well as transaction data gathered from a selection of agencies, including Better Homes.

Clever landlords

Some landlords still try to go against the law to find ways of evicting tenants who do not pay increases above that which is allowed by the index, so tenants need to be aware that unless they violate the terms of their tenancy agreement, they can only be evicted based on certain grounds, such as if the landlord wants to live in the property.

In such cases, landlords must give a 12-month notice period, although it is currently a grey area as to whether this applies from the date of the notice or from the expiry of the existing tenancy contract.

Either way, the tenant should inform the landlord that l2 months notice should be given, either via the notary public or registered mail. If this has not been done, the tenant has the right to stay. Landlords who feel they have a legal right to evict tenants for contract violations can open a case at the Real Estate Regulatory Agency (Rera) to have the eviction enforced.

On the other side of the coin, tenants must give a notice 90 days prior to the end of the contract if they wish to vacate. If neither party gives notice of changes prior to the end of the contract, it is automatically renewed on the same terms, meaning the landlord can technically ask for another year's rent if notice has not been given. In today's market, however, many landlords do not mind tenants leaving without notice when their contract expires as a new tenant who will pay the same or higher rent is more or less guaranteed.

At Better Homes, we have seen tenants becoming suspicious of landlords who say they want to sell or live in their properties. They often request proof. If a tenant is evicted on these grounds and later finds out that the landlord has not sold the property or has not moved in, the tenant can open a case at Rera to seek compensation for the moving costs and other expenses.

However, opening a case involves paying 3.5 per cent of the annual rent as a court fee and there will be other costs involved, which deter many tenants from filing a case.

Rent-increase notice

In addition to giving proper notice of eviction, landlords must give a 90-day notice of any rent increase and the proposed increase must be in line with Rera's online rental increase calculator.

The maximum increase is 20 per cent and the calculator can be updated during the notice period at Better Homes, we will often give notice that the rent may increase by up to 20 per cent and then work out the actual increase when the time to renew comes.

Both tenants and landlords should familiarize themselves with the calculator so landlords know what they can legally charge and there will be no surprises for the tenant when contract renewal comes around. Visit the DLD website to find out if your property qualifies for a rent increase.

Source: Zubin Firozi, Special to Property Weekly

The Writer is Head of Property Management at Better Homes, handling an extensive portfolio of buildings, villa compounds and Individual units in the UAE

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