Monday, 24 June 2013

Points to remember while renting a house in Dubai

Finding a property to rent is fairly straightforward and assuming the budget matches the market, then finding a place should take no time at all. But we suggest that tenants look around two to three weeks before their move in date. With rental scams in the headlines more than once, we advise only dealing with a trusted real estate agency. Check to confirm it has a trade license and their agents have a broker’s license. It would be better to use an agent you have heard of and one that has helped others you know. 

Check the condition of the property
The landlord by law is obliged to hand over a in working order property, so check its physical state. Remember electricity and water only gets connected when the lease is already signed, so any power, air conditioning or plumbing issues won’t show up immediately. Make sure a clause is included in the contract, which states you have a couple of days after moving in to report these issues and the landlord is obliged to sort them out. Check that the final bill for the electricity, water and air conditioning provider has been paid by the outgoing tenant or landlord, preferably before signing the tenancy agreement,Also make sure that no service fees are outstanding, as once cheques are handed over it can be very difficult to get owners to pay up. The law is silent as to whose responsibility it is to pay for the service fees. However, it requires the landlord to provide the property in a condition the tenant can enjoy. If the landlord does not pay the service fees and the tenant’s use of the property is interfered with, this would constitute breach of tenancy laws by landlord. In such event, the tenant could seek recourse against the landlord through the Rent Committee. 

Legal ownership
Don’t rent on trust. Make sure there is a title deed or Oqood on the property. Ask to see the original title deed or check in the land department’s registry (Oqood) and get a passport copy of the landlord. Check the name on the title deed or ownership document is the same as on the tenancy agreement, if not make checks for any power of attorney documentation. And remember, subletting is illegal.

The contract
The first rule is to read the contract thoroughly for all clauses on maintenance and charges. They are not uniform, but standard contracts usually have clauses added by agents - these are the ones that must be read carefully.

These should include provisions to deal with the early, unscheduled breaking of the lease, There is usually a fine of two months rent if you break the contract before a year. Make sure there are provisions on the tenancy contract that stipulates the responsibility of maintaining the property. Minor maintenance is normally paid by the tenant and major maintenance by the landlord. Ask the agent to include a checklist on the condition of the property.It is advisable to have a proper check-in procedure, as this will ensure the tenant has a smooth exit at the end of the tenancy and help to ring fence the deposit

Signing the lease
We recommend signing the lease in presence of the landlord and ensuring that any other signatory has the necessary, valid authorisations. Cheques should be issued in the name of the landlord only. If cheques are issued to a real estate management company, then they should have a notarized power of attorney authorizing them to receive cheques on behalf of the landlord.All rental agreements have to be registered on the Real Estate Regulatory Agency’s (RERA) on-line Ejari system. In case of any disputes the rent committee will ask for the Ejari certificate. Ensure that the landlord knows that it is a legal requirement to register the tenancy at Ejari and should also be responsible for the registration cost. 

Hidden costs
There are many fees and charges, make sure you only pay what you need to:

Agency fees
According to the Real Estate Regulatory Agency (Rera) ethical guidelines, a property broker should only charge commission to the party they are representing, However, there are loopholes. Depending whether the property is managed or not, the landlord will also be charged for this service but normally the commission is payable by the tenant only. The typical agency commission is five per cent of the yearly rent, but there is no law that specifies a minimum or maximum amount of allowed fees.

If you renew your lease through an agency or management company they may charge an administration fee, although not all of them do so. Your lease should stipulate the charge.Some charge approximately one per cent of the annual rent, or a flat rate of between Dh500 and Dh1000. In any case, the renewal fee should be agreed by all parties beforehand, during signing of the lease.

Ejari fees
If the property is managed then the agent can register it at Ejari on behalf of the landlord. The responsibility for Ejari registration lies with the landlord, but the tenant can now also register the tenancy themselves. The cost is AED 195 in person or AED 160 online. The Ejari fee also has to be paid on renewal, usually by the tenant and it should not be more than Dh200.

The deposit is usually paid with a post-dated cheque. The contract should have a clause saying in what time frame after vacating the property it should be returned to you. The deposit is usually five percent of the annual rent and should be held by the landlord. In some cases landlords may demand a deposit equivalent to one month’s rent. For furnished units the deposit is higher and would depend on the type of furniture and appliances.There are often arguments over whether the property was handed back in the same condition. This is why a checklist and, even better, photographs of the property are necessary. Also try and include a definition of normal wear and tear and responsibilities for maintenance. The tenant must ensure that the property is returned to the landlord in the same condition that it was rented. The landlord reserves the right to make deductions from the deposit in case of any damages to the property caused by the tenant

Water, electricity and district cooling
The Dubai Electricty and Water Authority requires a refundable deposit of Dh1,000 for an apartment and Dh2,000 for a villa. Check that the unit is registered in the current landlord’s name before you get the utilities connected.

You could ask the agent to connect the utilities for you. Some agents may do it for free, but tenants should expect to pay a nominal fee if they wish the agency to connect the utilitiesDistrict cooling deposits and connection fees vary according to the provider, but you can check their web-sites for up-to-date charges.

Unexpected charges
Some landlords charge if your rent cheque bounces. Most tenancy agreements will stipulate some penalty charges if the tenants rental cheques gets returned by the bank for any reason. This could range anywhere from Dh250 to Dh1000. Tenants must refer to their tenancy agreement to know if they would be charged and what the charges would be. Be aware it may not only apply when you have insufficient funds but also if your cheque is returned because your signature was what banks call ‘irregular’. Some contracts even state that if it happens more than once the landlord can evict you.

There shouldn’t be anything else to contend with, but we recommend that tenants always read the terms and conditions of the tenancy agreement as there may be other fees and charges for which the tenant may be liable to.

In case you require any support with the home search in UAE, HelpXpat is here to assist . 
We can be reached on 052 8102948 / 052 8102947 or

1 comment:

  1. Wow! Your articles are really superb. They really contain useful information. I was just thinking, what do you prefer more, renting or buying a property in Dubai?