Homefront: 'With just a year left in the UAE, should I move to secure lower rent?'
The Dubai resident's landlord refuses to reduce the rent on his four-bedroom villa
My rent for a four-bedroom villa is Dh210,000 and market rates for these properties in my community are about Dh175,000 to Dh180,000. My landlord is not interested in dropping the rent, which leaves me with a dilemma. I'm only planning on staying in the UAE for one more year, so should I shift to take advantage of a lower rent or will the costs involved, such as moving our stuff and agency fees, not make it worthwhile? I'm looking for the most cost-effective solution considering the short length of remaining stay here. HJ, Dubai
The Dubai real estate market, while properly regulated, still follows the same path as any other free market and in doing so there will always be winners and losers. Given it is a free market, both landlord or tenant, buyer or seller are free to choose at what price they buy/sell or rent/lease. Based on what is happening in the rental market right now, your landlord still has the choice of dropping the rent or not. To change his mind, my advice would be to organise a face-to-face meeting. Then you can clearly demonstrate what is currently happening in the market, backed up with statistics freely available online to support your revised rental amount.
It is important to convince him that if he doesn’t accept a revision, the potential consequences of you moving out will impact him negatively (assuming he will want to find another tenant) as he will be at the mercy of the market today. It is definitely a tenant's market, one where rents are coming down and where tenants are negotiating multiple cheques than ever before. Some landlords are offering 13 months for the price of 12, just to entice the tenant to take their property. Your landlord could be faced with this scenario, so surely it is better for him to deal with a person he knows and therefore just renegotiate with you. If all fails and he still remains firm on his stance about the rent, my advice would be not to pay it but to seek alternative accommodation. Despite you needing only one more 12-month contract, it might be better that you seek this elsewhere. The cost of moving are approximately as follows:
• new agency commission fee: 5 per cent of Dh175,000 is Dh8,750
• removal costs for a four-bed villa: approximately Dh6,000
There are of course Dewa, Ejari and cooling costs, many of these will involve the paying or collecting of deposits, which will affect your cashflow rather than actually cost you. Your security deposit will be returned (less any costs associated with giving the villa back as before) but don’t forget your new deposit will be considerably less too.
The approximate total cost of moving will be less than Dh15,000 but if you stay in your present villa, this will potentially cost Dh35,000. Unless you can get your present landlord to agree to lease it at Dh195,000 or less, then it is more cost-effective to move.
My tenancy contract is due for renewal on July 2. I have contacted the landlord several times to let him know I plan to stay in my apartment, but I have received no response or confirmation. Does this matter? HN, Abu Dhabi
The 60-day notice for Abu Dhabi residents should only be in the event that either party does not want to renew the lease. If no communication has taken place between the parties, it can be assumed that the tenancy contract will automatically renew under the exact same terms and conditions as before. The difficulty here lies in the lack of communication from the landlord. I say this because if you do not agree with the renewal on the exact same terms and conditions as before, such as the same rent, the same number of cheques etc, you will have to seek an agreement which may prove to be an issue.
As you have already communicated with the landlord on several occasions but to no avail, I suggest you now do nothing and wait for him to get in touch with you. In the meantime, rest assured that all is legal and despite the silence, you would have automatically renewed the contract.
Mario Volpi is the sales and leasing manager at Engel & Volkers. He has worked in the property sector for 34 years in London and Dubai.
The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to firstname.lastname@example.org
Updated: June 20, 2018 03:47 PM