Tenant's Guide 11

We have summarized our Dubai real estate experience and answered the most commonly asked by our clients property related questions. Use the search line to find the appropriate. If you do not see what you are looking for, you can always contact our Dubai realty specialists to get a professional advice.

Are there any restricting in determining rental value in Dubai?

There are no strict limits on the conditions of the rental agreement between landlord and tenant (as well as on the rental price) on signing the tenancy contract. However, at times of renewal, there are restrictions. The landlord needs to refer to the Real Estate Regulatory Agency’s (RERA) rental index if he/she has plans on increasing the rental value. The index acts as a guiding tool to determine rentals for properties in the various areas of Dubai and is referred to in cases of disputes between tenants and landlords, regarding rent increase caps. RERA’s online rent calculator helps determine how much the rent can be hiked up by.

What requirements does a tenant need to meet?

In cases of long-term rentals, the tenant needs to be either a resident of the UAE or if it is a company, it needs to be one that is registered in the UAE. When it comes to individuals, the tenancy contract can be drafted for both GCC nationals as well as UAE residents.

Is tenancy contract registration a requirement in Dubai and how do I go about doing this?

As per Article 4 of Law No. 33 of 2008, tenancy contracts should be registered with RERA. The Ejari system was set up to ease this process for both tenants and owners. Licensed management companies can register contracts online while individuals can visit specialised service centres in order to complete their Ejari registration.

Required documents to initiate Ejari registration include:

  • Copy of the title deed
  • Copy of the tenancy contract
  • Copy of the landlord’s passport
  • Copy of the tenant’s passport and visa page
  • RERA charges per registration of tenancy contract is AED 200. Once the documents are submitted and the payment is made, registration will usually be completed at the same time.

    How can one rent out property in Dubai?

    The following steps are usually involved in the process of renting out a property in Dubai:

    • 1. The owner, either on his own or with the help of a real estate agency, begins looking for a tenant.
    • 2. When a tenant is found, the owner signs a tenancy contract with all the terms and conditions mentioned clearly, including: rental price, rental period, additional expenses (clearly defining which parties are responsible for these payments) and responsibilities and penalties both parties face if they fail to uphold these terms.
    • 3. Upon signing the contract, the tenant needs to pay the rent in advance through post-dated cheques in addition to leaving a security deposit (which is usually 5% of the rental amount).
    • 4. On receiving the payment, the landlord hands over to the tenant keys, access cards, copies of ownership documents, his/her passport copy and utility account numbers.
    How does the tenant pay for the rent?

    In the Dubai market, rent is paid in advance through post-dated bank cheques for the year as per the conditions mentioned in the tenancy contract. For example, the rent can be paid in four cheques, with quarterly payments spread out across the year.

    Cheques may not be a 100% guaranteed method of receiving payment but in the UAE, issuing a cheque with insufficient funds in the account is a criminal offence.

    Who pays the commission to the real estate agency?

    If a deal was negotiated through a real estate agency, the tenant usually pays 5% commission to the agency. However, if the landlord requires additional services from the agency (for example, to represent him/her as a property owner in the UAE), additional agency fees can be discussed between the two parties.

    Who pays the utility bills for the rented property?

    Utility bills such as DEWA, air conditioning, internet, TV and housing fees (a municipality fee in the amount of 5% of the rental price is divided across the year and included as part of the DEWA bill) are paid by the tenant. These services are usually registered under the tenant’s name. The landlord is responsible for major maintenance and service charges for the property.

    Is it possible to conduct a deal without involving real estate agents?

    For the most part, real estate deals are made through agencies in Dubai (like everywhere else in the world). Realty agents are market experts and have up-to-date information on the industry and can help both property owners and buyers or tenants find a deal that suits them best. That being said, it is possible to negotiate a deal without an agency.

    What are the requirements that Dubai property agents need to meet?

    As per Law No. 85 of 2006 regarding the regulation of real estate brokers, these are some of the requirements for brokerages in the emirate:

    • Have an appropriate trade license from the Dubai Department of Economic Development;
    • The brokerage company and all its brokers must be registered with the RERA. Upon registration, agency is given an Office Registration Number (ORN) and its agents are given a Broker Registration Numbers (BRN);
    • In order to be registered with the RERA, all agents of a brokerage company need a certificate from the Dubai Real Estate Institute (DREI) and have to pass a professional test, administered by the RERA.
    • Brokers are required to comply with a Code of Ethics, published by the RERA.
    Why is it important that an agent is duly registered?

    The Dubai market is a melting pot of cultures and it can be a daunting task to those new to the country. It is difficult to trace down who is responsible in the event that something goes wrong in a property deal. Real estate agencies act as intermediaries between buyers and sellers and as such, there is a clear account of who is responsible and both buyer and seller knows where to turn when something goes wrong. Not all agents in the market are registered and it is essential that homeowners and tenants make sure that they are dealing with a registered agent to safeguard their own assets.

    As intermediaries, agencies are ethically obliged to work out a deal that is in the best interest of both parties. For example, the agency is responsible for collecting a deposit from the buyer and holding on to it until final payments are made to the seller. The buyer can be assured that he/she will receive the deposit back if something goes wrong with the deal on the part of the seller. Meanwhile, the seller is assured that they will be compensated if the deal is cancelled on the buyer’s part.

    What I have to Do before Moving out from Rented Apartment?

    In Dubai, there are some specifics associated with moving in/out from a rented premise. Here are some tips how to get your deposit back in full, and move out easy and fast:

    1. In Dubai, all relations between the tenant and the landlord are regulated by registered lease contract. Thus, a tenant is officially informed in advance about when he/she should prepare to move out. And the first thing to do is booking a moving service in order to do everything in time.
    2.  The other thing of high importance is transferring your internet and satellite television accounts to a new place of residence. Put a visit to your provider’s office in your schedule beforehand, in order to make a request to transfer your account to your new address, or cancel your current account in time.
    3.  A very important and specific moment for Dubai is also a timely disconnection of your DEWA account, which applies to water and electricity services. If you fail to notify the company of your moving out, you can face new DEWA bills for your old apartment even after vacating it.
    4. Another practice casual for Dubai is requiring moving permits for tenants who are moving in and out in some buildings and residential communities. So be prepared to get it in advance if needed.
    5. Under the terms of the lease contract, the tenant is obliged to vacate a premise leaving it in the same condition he found it when moving in. Few renovations and repairs (like painting the walls, filling in the holes and taking care of other damages and marks) would cost you less, if you do them yourself. Otherwise, the landlord may deduct the amount of repairs from your deposit, and this can be much more expensive.

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