Rent disputes have jumped up distinctly all over the world in the last few years because of many concerns faced by tenants and landlords. Tenants and landlords are equally responsible for the arousal of controversies. Finding a sound tenant and reliable landlord isn’t an easy job. You must have a realistic approach to grab the opportunity. Only a few tenants pay their rent on time, as per the guidance of the National Multifamily Housing Council, a trade association for the apartment industry. 

While  landlords also strive to utilize tenants by imposing tiresome rents. The extreme scarcity of rental accommodations in Dubai is another concern for both tenants and landlords. The dispute cases arise by 53%, from 4,700 cases in 2006 to 7,200 cases in 2007. That is alarming, but WBS, as your best business partner, has solutions to avoid such landlord tenant dispute.

WBS will help you decide how nice to market your rental property and let your property at the earliest. The crucial thing to most landlords is that a paying tenant occupies their property, but there are many things to consider before getting a tenancy agreement. We will consider all the aspects of the agreement to avoid future disputes.

Rental laws are Pro Tenant 

Rental laws and regulations for tenants are desirable and ensure foolproof security to stay for a longer time. The landlord and tenant decide even the preliminary rents through mutual understanding. The UAE government has favorable policies for the tenants. Any changes in the rent are according to the government’s rent cap policies. These rent cap policies also provide certainty to the time limit of a tenancy.

Real Estate Regulatory Agency (RERA)

Land departments are responsible for regulating the real estate sector. A real estate regulatory agency (RERA) is a government agency to manage the real estate sector in Dubai. It can handle and approve the new laws for the land department.

Previously parties were free to decide the initial rents, and after this initial contract the landlord was not able to increase rent before the completion of the first two years. However, after the expiry of this initial contract, the landlord and the tenant could take new decisions for the upcoming years. The new rental index is set by the RERA. According to the Real Estate Regulatory Agency (RERA), rent increases for contracts resuming in 2009 were not allowed if current rents were equal to or less than 25% of the new rental index set by the Real Estate Regulatory Authority (RERA). While current rent is below this threshold, then rent caps should apply obviously.

Security Deposit

That is the refundable amount to the tenant after the end of the contract or in case of termination. The landlord is bound to pay back this amount at the decided terms and conditions.

According to the Real Estate Regulatory Authority (RERA), that deposit is equivalent to 5% of the annual rent, and the tenant is bound to pay before tenancy, according to the Real Estate Regulatory Agency (RERA). 

The tenant is also attached to pay advance cash of AED1,000 rental laws (US$272) to AED2,000 (US$545) for the water provider and electricity company. Municipal tax is also expected to be paid by the tenant, but it is not compulsory.

Advance cash and cheques are accepted for the rent of the whole year. Installments option is also available for the tenants. The Real Estate Regulatory Authority (RERA) has designed such terms and conditions, which are pro tenants.

Landlord and Tenant Rights 

Tenancy relationship shall be stated in a written contract and registered with RERA according to the Tenancy Law of 2007. The consent of both parties is necessary for termination or renewal. Unilateral decisions or endings by the tenant or landlord are not acceptable. 

The tenant or a landlord desires to discontinue the contract prematurely, and then he is bound to give notice three months earlier. In case of eviction, the landlord is bound to include the cause of removal. After that the landlord is eligible to evict the tenant. The landlord is also eligible to evict the tenant if he is unable to pay the rent of that particular month even after a notification including:

• The tenant subleases the property without the authorization of the landlord.
• The tenant uses the property for illegal activities or unethical work.
• The tenant violates the Tenancy Act agreement and does not amend the breach within 30 days’ notice from the landlord.
• The tenant uses the site for any purpose, which is not allowed in the tenancy contract.
• The property is at risk of collapse; Even when the contract has already run out, the landlord cannot evict the tenant unless one of the conditions below is satisfied:
• The property is to be bulldozed or modernized (with the written approval of the municipality). However, the tenant should be superseded once the maintenance or repairing is over.
• The landlord desires to retrieve the premises for his personal use or his next kin of first degree. In that case, the Rent Committee (RERA) will not allow the landlord to rent over the property for one year.

When a tenant carries on to occupy the property after the contract’s ending date without the landlord’s protest, then the agreement will be reopened (on the same terms and conditions) either for a similar period or for one year, whichever is less.

Inflationary Pressures on Dubai Rental Laws

Inflationary pressures slashed the rent cap from 15% in 2006 to 7% in 2007 and further reduced it to 5% in 2008.

In 2009 a new rental index was introduced by the Real Estate Regulatory Agency (RERA) to replace rent caps. However, current rental rates were meager as compared to the new rent figures. Therefore, these high rental rates become a source of criticism for the Real Estate Regulatory Agency RERA.

This issue brings about RERA to refurbish the new rental index earlier than planned. So, that’s why RERA issued a revised index in April 2009. Those tenants who have not yet recommenced their contracts will likely hold on to their previous agreements until the new index is released.