A renter's manual at your finger tips

A renter's manual at your finger tipsImage Credit: Supplied

Renting in Dubai can be a daunting task for newcomers or anyone who has never gone looking for an apartment. Even if you've been renting for years, new laws are likely to have been introduced and rentals will have changed, putting you in a vulnerable position. Here are a few things to help you find the right unit and price.

Compare prices

Rents often dictate where we live, even more so in Dubai where payments are made in advance for the whole year or in two to four instalments. Thus, comparing prices is a logical first step. An excellent tool for doing that is the Rental Increase Calculator (rental index) created by the Real Estate Regulatory Agency (Rera). It can be found on the Dubai Land Department (DLD) website.

All you need to do is select a few details about your property to generate its market rental value and see whether it qualifies for an increase of rent. These details include property type, location and number of bedrooms, in addition to the tenancy contract expiry date, which can be up to three months ahead, and your current annual rent.

If you don't have a tenancy contract yet, you can simply enter a hypothetical expiry date and rent, just to check the market rental value. This will empower you to negotiate the price and strike a fair deal.

Deal with the right agents

Make sure you are dealing with Rera-registered agents and ask to see the broker's ID card issued by Rera.

Legalise your contract

Once you have settled on a property, you must register your tenancy agreement with Ejari, a system created to enhance transparency between property owners and tenants. You will also need this document to resolve any disputes with government agencies. Some real estate agents provide this as part of their service. Otherwise you can register your agreement by visiting a typing centre with your documents or online through Ejari.ae.

Refundable deposit

Expect to pay a refundable security deposit equivalent to 5 per cent of the annual rent, and make sure this deposit is mentioned both in your blue tenancy contract and your Ejari document.

Utility services

With your tenancy agreement in hand, you can apply for utility services such as electricity, water and internet connections.

Has your rent increased?

A year has passed and it's time to renew your contract, but you are met with an unexpected increase on your rent. Firstly, by law landlords or agents must give a 90-day notice if they want to increase the rent. Secondly, landlords are allowed to increase rent annually but to a certain limit.

In a nutshell, if you are paying 10 per cent or less than the market rate, your landlord is not permitted to increase the rent. But if your rent is 11-20 per cent below the market rate, then the landlord can increase the rent by up to 5 per cent. The larger the difference between your rent and the market rental rate, the higher the percentage that a landlord can increase. Use Rera's rental index, which is updated quarterly, to find out how much your landlord can legally raise the rent.

Have you been asked to move out?

A landlord can request eviction by giving a written notice 12 months in advance, which should be in the form of a notarised document or sent via registered mail. But there should be a valid reason for eviction — for example, if the owner wishes to sell the property or wants to move in. In the latter case, the landlord cannot relet the property for two years from the date of eviction.

Tenant refuses to leave

Landlords can evict tenants before the contract expires if the latter commits a violation based on Law No. 33 of 2013. For instance, if a tenant has not paid rent, the property owner should send a notification via courier or the notary and allow 30 days for the issue to be rectified. If the rent is unpaid even after this period, the owner can open a case with the Rental Disputes Centre (RDC) at the DLD, which would issue a vacating notice to the tenant. A case can also be opened on Rdc.gov.ae.

Three laws to remember

Both landlords and tenants should familiarise themselves with the main laws that cover property rental in Dubai to understand their rights and responsibilities.

• Law No. 33 of 2008 — Amends some provisions of Law No. 26 of 2007 and regulates the relationship between landlord and tenant.

• Decree No. 43 of 2013 — Concerned with the maximum property rent increases that are allowed upon the renewal of tenancy contracts.

• Decree No. 26 of 2013 — Concerned with disputes in the RDC, also known as the Tenancy Disputes Settlement Centre.

Are rents going up or down?

Property rents in Dubai have been steadily climbing over the past few years but may finally peak in 2016 as more supply enters the market. An estimated 20,000-25,000 new residential properties are expected to be completed this year, which could pressure rents to come down by 5-10 per cent. With the onset of summer and Ramadan, this could be the best time for tenants to secure a competitive deal, whether on actual rents or payment terms.

Rental benchmark by Dubai Rental Index as of June 2015

Freehold Community One-bedroom unit (Dh/year)
Business Bay 90,000 – 110,000
Discovery Gardens 60,000 – 75,000
Downtown Dubai 100,000 – 120,000
DIFC – Sky Gardens 80,000 – 115,000
DIFC – Liberty House 90,000 – 95,000
Dubai Marina 90,000 – 120,000
Dubai Silicon Oasis 50,000 – 70,000
Dubai Sports City 60,000 – 75,000
Gardens 53,000 – 60,000
Greens 80,000 – 90,000
International City 40,000 – 50,000
Jumeirah Beach Residence 100,000 – 130,000
Jumeirah Lakes Towers 80,000 – 100,000
Palm Jumeirah 130,000 – 160,000
Tecom 70,000 – 80,000
Uptown Motor City 65,000 – 80,000

Find out the multiple factors arresting the pace of rental growth in Dubai

Source: Niraj Masand, Special to Property Weekly

The author is Director at Banke International Properties, a boutique real estate brokerage based in Dubai


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