In Dubai, rents are normally paid for the entire year up front, and paid by cheque. Cheque payments are usually expected to be paid in 1, 2, 3 or 4 installments (maximum), but it does depend on the individual owners.
Most rental or lease agreements in Dubai are renewed annually. If an existing tenant wants to renew the lease agreement for a 2nd year and/or thereafter, then any increases should be in line with the RERA Rental Index and notification to the other party for the said increase must be made no less than 90 Days’ prior to the expiration of the Tenancy Contract. http://www.dubailand.gov.ae/English/Pages/Rental-Increase-calculator.aspx
In the event of a dispute between the tenant and the landlord, the RERA’s Rent Committee in Dubai Land Department will settle the issues. However, in order to submit a dispute, it is important that the Tenancy contract is registered under Ejari.
Use ONLY, a RERA registered broker/agent if choosing to use an agent.
The tenant has the right to request a renewal of the lease, by giving the landlord 3 months written notice. Should the landlord wishes not to renew the contract, he has to give the tenant 12 months written notice via Notary Public and reasons for not renewing the contract which can be either of the following:
Where the landlord / owner wishes to demolish the Property to reconstruct or to add new constructions that will prevent the tenant from using the property provided that the required permits are obtain from Dubai Municipality
Where the landlord / owner wishes to take possession of the property for his personal use or by any of his first-degree relatives, provided that he does not own another real Property appropriate for such purpose.
Where the landlord / owner wishes to sell the leased property
The tenant is responsible for the general maintenance of the property during the period of the tenancy contract or as per agreed between parties.
The tenant is required to pay a refundable security deposit when signing the tenancy contract. This deposit will be returned to the tenant at the end of the tenancy contract, provided that the property is handed back to the landlord in a satisfactory condition, all final bills have been paid, Ejari Contract has been cancelled, and proof of those bills are shown to the landlord.
The rental payments will be agreed upon by both the landlord and tenant before signing the tenancy agreement.
Unless the lease agreement states otherwise, the tenant is responsible for water and electricity (DEWA) bills, government taxes, and any monthly air conditioning consumption (EMPOWER) relating to the property.
The landlord is responsible to register his property in Ejari and the tenant is responsible to pay for its cost.
Any improvements or alterations made to the property need to be approved by the landlord first.
Subleasing the property is illegal without the approval of the landlord.
The landlord is prohibited from disconnecting services to the property or preventing the tenant from benefiting from the leased property.
The landlord reserves the right to evict the tenant from the property before the expiry of the lease agreement unless:
The tenant fails to pay the rent or any part thereof, within thirty (30) days after the date a Notary Notice to pay is given to the tenant by the landlord
If the tenant sub-leases the property without the approval of the landlord
If the tenant use the property for any Unauthorized and illegal purposes
If any of the terms and conditions stated in the lease agreement is broken by the tenant
If the tenant leaves the property without the consent of the landlord for no valid reasons for thirty (30) days or ninety (90) days within the same year
If the tenant makes changes in the property that makes it unsafe and in a manner that makes it impossible to restore to its original state
A refundable security deposit that is usually 5% (UNFURNISHED) OR 10% (FURNISHED) of the agreed total rental amount is required to be made payable to the landlord.
A refundable security deposit of AED AED 2,000 (for Apartment) or AED 4,000 (for Villa) must be paid to the electricity/water provider (DEWA for Dubai) of the Emirate you are residing in when you move into the property.
Depending on the area and project, you may also need to pay a deposit to either Empower or Palm District Cooling which are separate air conditioning suppliers. These bills unless specified in your contract will be separate from your regular water and electricity supplier.
A housing tax is charged which is included in your monthly DEWA bill, which is equivalent to 5% of the annual rent (12 months).
Use ONLY, a RERA registered broker/agent if choosing to use an agent.
When using a registered agent / broker, ensure you have appointed them with the approved documents and ensure the agent has good market knowledge on pricing, availability, and RERA Rules and regulations.
Make sure you maintain communication with your agent, If the agent does not do what they agreed to do, terminate them and find another agent. Loss of rental income is loss of your money.
During the time that a property is vacant, there is basic preventative maintenance required such as watering, cleaning, due to dust and other minor issues that need your attention. Ensure you take care of these short term costs to avoid long term headaches and unexpected costs.
The landlord must keep the property in a safe condition and ensure the tenant gains benefit from the rented property unless otherwise agreed between the two parties.
Before leasing–out his property, the landlord must make sure that the tenant is having a residence visa in Dubai. In case it is not yet ready, the tenant must provide the landlord a letter from his company that his employment/residence visa is on process. Otherwise, the tenant CANNOT apply for DEWA and EJARI.
The landlord/owner is responsible to pay the yearly service charges of the property.
It is also advisable for the Landlord to provide the tenant a list of approved maintenance people permitted to work on the property in case of emergency. E.g. Plumber, air-conditioning specialist, electrician, general repairman, and swimming pool maintenance. However, the maintenance team must seek the landlord's approval of costs prior to commencing with any work.
All Dubai landlords should be familiar with Law No. (26). of 2007, which is the law governing the relationship between the landlord and the tenant.
From the Landlord:
Proof of Ownership of the Property (Title Deed)
Passport Copy of the landlord, name should appear the same as in the Title Deed (including joint owner)
Final Paid DEWA bill showing DEWA Premise No.
Copy of Ejari Cancellation from the Previous tenant
Copy of Latest Service fees payment
Valid POA Copy (if the owner has POA) *POA is valid for 2 years from the date of issuance of Notary Republic*
Valid Passport Copy of the POA
Receipt of all funds that has been paid towards renting the property
From the tenant:
Valid Passport Copy of the tenant with Visa Page
Valid Emirates ID copy of the tenant
From the Agent/Broker:
Copy of Valid RERA Card being appointed/representative of either the tenant or landlord or both
The Owners' Association (if applicable) rules and regulations for the tenant or the Master Community Declaration rules and regulations if applicable.
The owner has the option to insure his property in the unfortunate event of the property being burnt down or damaged. The tenant should take out contents insurance for their personal belongings.
The landlord may sell his/her property during the period of a lease agreement. However, the tenant has the right to occupy the property for the period of their lease agreement and the new owner is obliged to honor the lease agreement until the end of the expiry. A renewal of the lease agreement will be at the discretion of the tenant, however, should the new landlord wishes to use the property for their own residential use, he must give a 12 month notice to the tenant via Notary Public.
The agent / Broker doesn’t have the right to collect his commission payment UNLESS the Tenancy Contyract is signed by both parties.
The Agent / Broker doesn’t have the right to collect any rental payment towards the property under his name provided he has a proof from the owner/landlord that he is authorized to do the same (POA)
'Best Practice' dictates that if a tenanted property is to be sold, the seller should provide a copy of the current tenancy contract to the Sales Listing Agent and ensure that a 'Special Condition' clause be inserted in the contract by the agent. This should detail the requirement for having the landlord (the seller) and the tenant provide a 'Property Condition Report' specifying any problems and a transfer of the tenant's security deposit from the old landlord to the new landlord and alerting the tenant to the same.
This practice shall set clear agreements pertaining to the tenancy which is forming part of a sale agreement. Tenants need to be factored into this process and acknowledged the right of tenancy and respected, new owners need to be aware of their responsibilities and yet protected against inheriting an unforeseen problem or undeclared expense, and the landlord (the seller) must act honestly, respectfully and responsibly transferring the tenancy landlord obligations.
In real estate, everything is negotiable, and the outcome depends on the negotiator's skills, knowledge, preparation, courtesy, consideration and several other factors relating to the people, the circumstances and of course, timing of the negotiation.
*The above information is subject to change in accordance with the Land Department, Rental Committee and UAE Law.
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MENA Properties Services LLC
Office No. 05, Indigo Central 7,
Al Manara, Sheikh Zayed Road,
P.O. Box 211074, Dubai, UAE