Renting in Dubai Compared to the UK
When a UK national becomes a Dubai expat, invariably the topic of housing (mainly renting) will be first on the agenda. Finding a new home can be fairly daunting in an unfamiliar country and whilst there are many similarities between renting in Dubai versus renting in the UK, there are also many differences that need to be taken into consideration to fully understand the process. Below is a snapshot of tips a potential tenant should be made aware of;
1. The Estate Agent
When contacting an agent to register for ones required property, make sure that the agency and the individual is registered at the Real Estate Regulatory Agency (RERA). This will ensure that the company or individual ought to be of a certain professional standard but will also help you in the future should a problem arise. Do not fall into the trap of contacting the agent too early on in your search. The renting process in the UK can take several weeks after a suitable property is found as credit checks have to be carried out along with other references such as previous landlord references. In Dubai this process is much, much quicker as neither a reference is taken up nor is anyone’s credit checked. The reason for this is that the rent is paid in either one or a number of cheques but these are handed to the landlord upfront.
A tenant can actually be moved into the property within days of the initial viewing. When viewing a property it is fairly common for the agent to just send you unaccompanied and do not be surprised to learn that the property door will be open. The reason for this is to allow maximum exposure as it is fairly common for the same property to be listed with a large number of agents and does away for the need of keys. More and more agents will however still accompany the viewing as this is a major turn off for renters when quizzed about the level of service offered by their agent.
Unlike the UK, in Dubai it is the tenant that pays the agents commission. This is normally between 5% of the annual rental amount or up to one month’s rent. Be aware that there could also be a minimum fee of AED 5,000, whichever is the greater.
The deposit is also 5% which is payable to the landlord/owner, this too could be more if the leased property is fully furnished for example. The deposit (or return of) is the single most common reason why landlords and tenants fall out. In Dubai, the deposit is given as a guarantee or security against damage to the property and to ensure it is returned in exactly the same condition as it was given. This therefore means that the landlord may use some or all of the deposit to re-paint and/or clean it after a tenant has vacated.
In the UK this works in a more regulated fashion as the deposit sits within a government approved scheme and can only be used under certain circumstances with the remainder (or all) always given back 100% of the time.
4. The payment
When a property has been chosen and the rental amount along with the number of cheques have been agreed, it is of vital importance that any cheques are written out in the name of the landlord/owner. This seems an obvious thing to say but so many tenants have been victims of rental scams in the past by issuing payments to anyone other than the actual owner.
Always insist on seeing evidence of ownership by requesting sight of the title deeds and passport copy to check signatures, therefore only make cheques out to the landlord/owners only. On occasion the owner may have appointed a power of attorney (POA), in this instance check the POA document carefully and if anything looks suspicious walk away from the deal.
5. Moving in
In Dubai when a tenant moves into the property, there is generally no “check in” or inventory report as such and it is advisable that he/she makes comprehensive notes or take photographs as proof of condition so there are no issues in the future when vacating. A tenant should also allow for up to 3 days to get the water/electricity supply (DEWA) to be connected after a deposit fee of AED 2,120 is paid for apartments and AED 4,120 for villas.
For connection of the A/C supply the deposit is dependent on the individual company but a rule of thumb is dependent on the size of the property whether apartment or villa.
6. Renewing your lease
Communication between landlords and tenants is key to a good working relationship. Informing the landlord in writing 90 days before the expiration of the contract that the tenant wishes to renew is good practice. If no contact is made between the parties and there is no objection either, the contract then automatically renews for another year under the same terms as the previous agreement. If the tenant or landlord has used the services of an agent to effect the renewal, it is most likely that there will be a renewal fee charged. This fee can be anything from AED 500-1,000 and is payable by either landlord or tenant or shared.
7. Rental increases
The Dubai landlord can only increase the rent if one of two situations occur. A). If the landlord has given a 90 day notice in writing that there will be an increase in the rent. AND B). If the RERA rental calculator allows for the increase. The calculator can be found on the Dubai land department website at https://www.dubailand.gov.ae/English/Pages/rental-increase-calculator.aspx. The rental calculator is updated once a year beginning 1st Jan. 2016
8. Breaking the lease
If a tenant wishes to leave the rented property before the end of the contract period this is at the discretion of the landlord unless there is a specific break clause incorporated within the contract. Under normal circumstances it is common for the landlord to charge 1-2 months’ rent as compensation. In the majority of situations although finding your next home can be stressful, the whole process can and often does conclude without any mishaps especially if the above is noted. Happy house hunting!
Mario Volpi is the Manager of Residential Sales and Leasing at Engel & Völkers with over 25 years experience in London & Dubai Real Estate.