Here’s our CEO & Founder, Michael Lahyani’s column in Khaleej Times, where he discusses the age-old problem — one of greedy landlords and worried tenants.
The problem that just won’t go away
Michael Lahyani (Property Focus) / 23 February 2014
If you’re a tenant worried about soaring rents or being evicted by your landlord looking to make a quick buck, you’re not alone. Knowing where you stand with respect to your legal rights is key to understanding the changes your landlord can and cannot make to the leasing contract.
If you’re panicking that your landlord will increase your rent by a ridiculous number, remember that the lease cannot be arbitrarily raised. Today, whether or not a landlord can increase the rent is not governed by a two-year stay, but by the Real Estate Regulatory Agency rent calculator, which is found on the dubailand.gov.ae website.
Further, the landlord cannot evict you and re-let at a higher rent than what you are currently paying. Also, as per the new rent decree, a property has to be at least 11 per cent below market rental value to be eligible for a rent increase of five per cent. If the lease is between 21 and 30 per cent below market rate, the rent can be increased by up to 10 per cent. Those properties leasing at 31 to 40 per cent below average value can be increased by a maximum of 15 per cent whilst residences leasing at 40 per cent below average can be hiked by up to a maximum of 20 per cent.
As a tenant, you should also be given a 90-day notice period should your landlord wish to impose an increase to the existing rent value. If you want to find out by how much your rent can legally go up, check the online rental increase calculator.
I’ve also heard about agents charging the full five per cent fee whilst renewing a tenancy contract. This is not the norm. While it’s unfair to expect agents to redraw an agreement for free, Dh1,000 is the acceptable fee. So, make sure you don’t pay more.
Now, what if your landlord declares that he wants to sell the property? In this case, he is legally obliged to give you 12 months’ notice to vacate. This notification should be notarised and sent to you via registered post.
Additionally, if the landlord or his next of kin wish to move into the property, aside from the 12 months’ notice, they need to prove that there is no suitable, alternative property that they can reside in. So, how do you find out if the property has been sold and who the new owner is? Head over to the Land Department with your tenancy agreement and passport copy and request the details.
While Dubai’s current rental climate might seem to favour landlords, it doesn’t imply doom for tenants. Yes, the market’s on the upswing but it is also more regulated today. Happy landlords are less likely to cheat the system to evict tenants, which in turn, is good news for renters. Not just this; as a tenant, you can cut costs through clever negotiation and smart budgeting. Remember that while you can request for a rent cut, you need to offer some value in return for the discount as well. All landlords want tenants who pay their rent on time, take care of their property and keep noise levels down.
So, if you’ve exhibited a spotless rental payment history and have maintained the house well, make sure you mention it to your landlord. Or, perhaps consider signing a longer lease to avail a discount. Your landlord might agree to a rent cut knowing that he will have an occupied unit for another year.