x Abu Dhabi, UAEFriday 21 July 2017

Homefront: Dubai apartment owner needs to talk things through with tenant

Mario Volpi solves the property woes of both landlords and tenants.

I bought an apartment last month. There is a tenant living in the apartment, who has an eviction notice from the previous owner, with the eviction date as June 2014. That is the rent expiration date as well. I want to rent this apartment to the new tenant at a market price, once the existing tenant leaves. If the current tenant wants to stay in the apartment and sign a new contract with me, will it be considered as a new contract or will Rera view it as a renewal and therefore will the rent cap apply? Or I should look for a new tenant? SC, Dubai

The fact that you have bought property as an investment and not to live in yourself will determine that if the present tenant wishes to stay he should be allowed to do so irrespective if his landlord has changed. As per the law his contract will therefore effectively continue and in doing so the rent cap will come into play. If the tenant does leave, then you are at liberty to ask market rent but the law appears to be on the side of the tenant, if he wishes to stay. It is all about the negotiating with him. The rent. however, is not open to any negotiating as the Rera rent calculator will determine it.

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We have been given 12 months’ notice in writing by our landlord to move out of our property. This is after they tried to negotiate more rent than advised by the rent calculator. Originally they said they had a friend who would be moving in but after we queried this based on the Rera law, they changed it and said the landlord would be moving in himself. They have written us a letter to say this. Is there any way we can register this letter with Ejari, so if they then do relet they will not be issued a new tenancy contract for new tenants for two years? Will this also position us better with the rent committee to claim back our expenses? I haven’t heard of a case where anyone has been able to claim their expenses back and I am unclear on the process. VH, Dubai

Here is another landlord that appears to be trying his luck, either he is moving in himself or he is not. I get countless letters from tenants telling me that their landlord wants to move in then changing their minds saying they now want to sell. All to try to get the tenant out so they can relet at market rate.

If you do leave and you subsequently find out that the landlord has relet the property within two years of your eviction, all you have to do is open a case at the rent committee. If they find in your favour, and there is no reason why they wouldn’t, then you would be entitled to compensation. My advice is to keep everything in writing and to get as much written evidence as possible from the landlord that states his intentions and do get it translated into Arabic before going to the rent committee (if need be).

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I have been given notice that my rent will increase by Dh20,000 from April 1 this year. I have read in detail summaries of the laws as they stand now. My interpretation of the law is that the two-year rule still applies. For example, the landlord can apply a rent increase for the third year, not the second. In my case the landlord has not given me 90 days’ notice and if the two-year rule does not apply he could only raise the rent by 5 per cent. That would be by Dh11,000, not the Dh20,000 requested. DG, Dubai

Law 26 of 2007 has been amended and the “two-year no increase in rent” rule (article 9) has been amended and is not in force any more. Your landlord can raise the rent from year one only on the proviso that the Rera rent calculator says so. You and your landlord should notify each other at least 90 days before the expiry of the tenancy if either of you wish to alter the contract. If this window expires and your landlord has not notified you of any increases or changes, in theory the contract should now not be altered from the previous year.

Mario Volpi is the managing director of Prestige Real Estate in Dubai (prestigedubai.com). He has 30 years of property industry experience in the emirate and London. Send any questions to mario@prestigedubai.com