DUBAI // Landlords trying to take advantage of the revival of Dubai’s real estate sector by hiking their tenants’ rents by as much as 50 per cent are facing resistance from those who know their rights.
Rents have climbed by an average of 20 per cent since last year, according to Asteco real estate consultancy. But a 2011 Real Estate Regulatory Agency (Rera) decree makes it illegal to raise the rent of an existing tenant by more than 5 to 20 per cent – and then only if the current rent is 25 to 55 per cent below the Rera rent index.
Nizar, who rents an apartment in Dubai Marina, was asked to pay Dh88,000 in January up from the Dh70,000 he paid last year – a hike of almost 26 per cent.
“I got advice from my workmate who faced the same problem; I sent [the landlord] an official letter through the public notary and I said I would agree to pay the increase as per Rera law only.
“It worked. Now I’m paying Dh72,500,” said the Syrian national who has lived in Dubai for two years.
“There is a government here so nobody can play around with us.”
Mohammed Bin Hammad, a senior director in Rera’s regulatory department, said tenants and landlords should try to negotiate first.
“If this fails, a tenant who has registered his tenancy agreement through Rera can send an official letter through a public notary indicating that he wishes to renew the contract as per the law,” he said.
“In case the landlord still refuses then a dispute case can be filed with the Rent Committee.”
Shahram Safai, a partner at Afridi & Angell legal consultants, explained the landlord would need to approach the Rent Committee.
“In negotiations the tenant can say I will pay you the existing amount and the amount that is allowed by law and I will not move out because you don’t have the right to raise rent this much,” he said.
“If the landlord does not back down, the tenant can refuse to pay the higher amount. They can say they will not pay the illegal rent and can continue in possession on the existing rent or the maximum rent applicable.”
Decisions by Dubai Municipality’s Rent Committee are considered binding.
Legal experts said the law also gives tenants time. “A landlord is required to give at least 90 days notice before renewal for any change to rental terms, including rent,” said Alexis Waller, a partner at legal firm Clyde & Co.
“So if a tenant has not had 90 days notice of any intended rent hike they can argue this provision.”
Those who do not want to take on the landlord are looking further afield for solutions.
Shahnawaz Kalim, an automobile salesman who paid Dh34,000 for a one-bedroom in 2011 in Dubai’s Al Nahda area, said he could not afford the 30 per cent hike. Instead of a lengthy fight, he found an apartment for Dh38,000 in Silicon Oasis.
“These rates are hard to digest,” he said. “Instead of focusing on my career, I’m surrounded by these issues. Half the time I’m worried what I will do next year.”
Rising rents will continue to push people away from the centre of Dubai, said Craig Plumb, the head of research at property management firm Jones Lang Lasalle.
“Lease contracts are under the protection of the rent cap so people shouldn’t panic because if landlords are pushing for an exorbitant increase they should point out that by law this is not allowed,” he said.
“But people will also look at newer areas such as Dubailand where rents will be lower.”
source: http://www.thenational.ae
Tags: Dubai, Landlords, rents, Tenants
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