Rent rows are on the rise in Dubai as landlords seek to evict tenants to benefit from surging rents across the emirate.
Landlord-tenant legal disputes have jumped by as much as half, fuelled by rents increases of more than 40 per cent over the last year in some locations.
Halim Samir Kanaan, an attorney at Kanaan Advocates & Legal Consultants in Deira, says his firm has seen a 50 per cent increase in the number of rent disputes it has been handling over the past year as landlords attempt to circumvent rent rise caps designed to protect tenants.
“Volumes have increased significantly because it is more in the interests of some landlords to evict tenants and find someone new to rent at a higher rate,” he says. “We deal with landlords in the old part of Dubai as well as individuals living in the newer areas. This is something we are seeing across the board.”
The number of rent cases his firm is taking to the tribunal has jumped by 70 per cent over the same period as both landlords and tenants have more at stake to make it worthwhile going to law.
Jonathon Davidson, a partner at Davidson & Co law firm in Dubai also reports a sharp rise in rent dispute inquiries.
“The number of calls we are getting from tenants about rent disputes has gone up by around 30 per cent over the last six to eight months because tenants are getting smarter about their rights,” he says.
Ludmila Yamalova, the founder and managing partner at the law firm HPL Yamalova & Plewka JLT says the number of inquiries her firm receives on the subject has increased over the last year from virtually none to at least one call a day.
“A year and a half ago it just wasn’t an issue. Landlords were just happy to have someone in their properties paying the rent,” she said. “Now we see landlords trying to get increases in rents which average out at 25 to 30 per cent,” Ms Yamalova adds. “Of course in most cases that’s against the law and so they are trying to evict tenants.”
Dubai’s new rent dispute body already faces a barrage of landlord-tenant rows weeks before it opens for business next month.
The fast track centre aims to process as many as 250 cases a week when fully operational and will aim to resolve disputes within 30 days. It will comprise 10 committees, eight of which will handle cases of first instance, and the other two appeals.
But although all the lawyers spoken to by The National reported an increase in the number of inquiries they are receiving regarding rent disputes, some report that as tenants become more savvy about their rights, the number of cases actually reaching tribunal is starting to drop.
“We have seen a 10 to 15 per cent fall in the number of cases which are actually going to the tribunals because the law has become a lot more robust,” says Mr Davidson. “Landlords and tenants understand that the losing party must pay 3.5 per cent of the annual rent to the tribunal so both sides are usually prepared to meet somewhere in the middle in the end.”
“We believe that as time goes by the number of cases actually coming through will start to fall as tenants and landlords get a better idea of that the law actually says,” adds Ms Yamalova. “Most of these disputes can be resolved through better education for both tenants and landlords.”
Rents in Dubai are regulated by Rera (Real Estate Regulatory Authority) which prescribes by how much landlords in the emirate are allowed to raise prices each year. The authority sets out these amounts in a rent calculator published on the Dubai Land Department website. Rents that are less than 25 per cent below the index figure may not be raised at all.
On a Sunday morning in October when The National visited the agency offices in Deira, about 20 people were waiting to discuss their rent-related disputes. A small crowd of eight visitors hovered nervously outside the offices of Hamdan Hamad Al Madhani, the rent regulatory section manager while a dozen or so people waited in a designated waiting area to discuss rent issues.
“Rents are going up so quickly and to be very honest no-one wants to leave their home and the landlords know this so they are trying to play with us,” says Irfan Awan, a marketing manager for British American Tobacco, who has frequented the Rera offices in an attempt to cap the rent increase his landlord was demanding for a two-bedroom flat in Al Barsha.
“There are rules and regulations which we need to follow and we should follow laid down in the rent calculator but landlords ask too much.”
Mr Awan disputed a Dh5,000 rent increase on his Dh52,000 a year rent, arguing that the increase was above that permitted by the rent calculator. Eventually his landlord agreed to a Dh3,000 rise. However, Mr Awan is preparing to fight another demand for an increase next year.
And the number of people doing the same as him looks set to increase even further in coming months. According Asteco, average rents for a one-bedroom flat in International City have risen from Dh23,000 a year in 2012 to Dh32,500 at the end of September – an increase of 41.3 per cent. At the same time average rent for a three-bedroom villa in The Springs rose 32 per cent from Dh125,000 in 2012 to Dh165,000.