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Negotiating the property market in Dubai can be a bewildering experience. With potential legal and financial pitfalls, knowing how to get the right help and support could ultimately save you thousands of dirhams. When it comes to renegotiating your rent or settling a dispute with your landlord, government legislation is already in place, covering everything from utilities and service charges, to the amount your landlord is entitled to increase your rent, once your initial agreement has expired. With help from property experts, here we outline the key steps you can take to protect yourself and make the informed choices when hunting for a property.
Use a registered agent
Mario Volpi, Head of Projects at Asteco Property Management, recommends using a Real Estate Regulatory Agency (Rera) registered agent. “This is because if there is a problem, such as your landlord illegally raising your rent, you can go to Rera. If you are dealing with, what I call, a freelancer, you don’t have anyone to go to. If you want to avoid the 5 per cent agency commission, you can always rent privately but, I think, it is always good to have a middle man to negotiate for you, especially if your landlord turns out to be difficult.”
Concentrate on areas
If your budget stretches to the upper end of the Dubai market, Robin The, UAE Country Manager at Chesterton Mena, suggests Dubai Marina, Jumeirah Lakes Tower, Business Bay, Palm Jumeriah, Downtown Dubai and Emirates Hills as solid starting points for your property hunt. You can currently expect to find a one bedroom apartment in Dubai Marina for Dh90,000-110,000 annually. If you are looking for more affordable options, Teh suggests looking at areas including Dubai Silicon Oasis, International City, Discovery Gardens and Motor City, where properties can be secured for as low as Dh40,000 per year.
Facilities on offer
According to Teh the amenities of a property are one of the major factors considered by customers. “These amenities usually depend on affordability,” he says. “For instance, units in Palm Jumeirah’s Shoreline Apartments come with an exclusive range of facilities, which include private pools, gyms, maintenance, a private beach, dance studios, resident parking, visitor parking, 24-hour security and children’s play areas. While, on the other hand, the cheaper units in Motor City and Discovery Gardens include facilities like resident parking, a gymnasium, a swimming pool and 24-hour security.”
Register on Ejari
Once you have decided on your property and you have a tenancy agreement from a registered agent, the next step is to register your rental contract on the Ejari (“my rent” in Arabic) online system, so that there is an official record. The cost is Dh545 and although this is normally the responsibility of the landlord, tenants often process this themselves because they need the registration to sponsor a maid, or for their family.
Volpi suggests taking a trip to an Ejari typing centre “because you have to upload passport copies, and provide documents like title deeds, so it is probably simpler to do it at the centre.”
Service and chiller charges
According to Volpi, the service charges don’t fall on the lap of the tenant. Service charges are the responsibility of the landlord because they come under the maintenance of the property.
“Chiller [air conditioning] charges vary. The rent is generally higher if air conditioning is included in the maintenance.”
Budget for Dewa
Water and electricity are essential so most tenants will need to register their utilities with Dubai Electricity and Water Authority (Dewa). For an apartment, the charge is now Dh2,000 and for a villa it is Dh4,000.
Maintenance costs can be a contentious issue, so Volpi recommends clarifying this in your tenancy agreement. “We often put clauses into our contracts that physically state an amount of money. Generally contracts state that ‘major maintenance’ is the responsibility of the landlord and ‘minor maintenance’ is the responsibility of the tenant. But again, what does that mean? We say that anything that is under Dh500 is regarded as minor maintenance and so by putting a monetary value in there, we can avoid any confusion about what one party thinks is major and another person believes is minor.”
Before 2008, most tenancy contracts had no provision for this. So, if you are an expatriate and you had to go back home, or you lost your job, you were at the mercy of your landlord, in terms of if he would give you back your money.
Most tenancy agreements now have an addendum attached to them, which states that there is a break clause in the contract. The clause is normally a two-month penalty. If you have to break your tenancy agreement, you effectively pay two months rent to allow the landlord to free you from the contract. However, often landlords are quite happy to return all of your money if another tenant has been found.
Officially, the rental deposit is 5 per cent of the annual rent. Volpi says, “Most agents don’t manage properties, they just provide a brokerage service. Once the tenant is in and signed up, the agent has done their job. Once the tenancy agreement is signed, you normally need to pay three cheques. One is the deposit for the landlord, one is the commission for the agent, if you used an agency, and the third is the rental cheque. Currently, most landlords insist on one or two rental cheques but most tenants want [the annual rent] to be split between two and four.”
Source: Peter Feely, Special to Property Weekly