x Abu Dhabi, UAEThursday 27 July 2017

Businesses must register tenancy agreements

Businesses will be required to register their landlord-tenant agreements in order to get or renew their commercial licenses from next month, officials said.

DUBAI // Businesses will have to register their property-lease agreements to obtain or renew their commercial licences, officials said yesterday.

The regulation, which comes into force next month, was announced jointly by the Real Estate Regulatory Agency (Rera) – the regulatory arm of the Dubai Land Department – and Dubai’s Department of Economic Development (Ded).

The property lease  will be needed to renew, amend, or receive new commercial licences issued by the Ded, said Marwan bin Ghalita, the Rera chief executive.

“Linking lease contracts with commercial licensing procedures in Dubai will protect the rental rights of all parties to help avoid disputes since the contract will be authorised by a government body,” Mr bin Ghalita said.

“It would also be a good indicator to update the rental index by providing reliable and accurate data.”

Officials conducted a six-month pilot programme to ensure the Rera and Ded systems were compatible, said Mohammed Shael, chief executive of the Ded’s business registration and licensing division.

“This will be our building block,” Mr Shael said. “It will help not just with tenancy disputes but once we have an exact location for a business we can enrich the area with amenities.

“We will have a better understanding of the businesses there and infrastructure needed.”

Officials said they tried to gradually introduce compliance over the past two years.

“Immigration and Dewa [the Dubai Electricity and Water Authority] now also ask for registered contracts,” said Khalifa Al Suwaidi, the chief executive of Emirates Real Estate Solutions, a subsidiary of the Land Department.

“Once you have this, it will be smooth to process any document.”

The Ejari initiative is part of an effort to standardise contracts and regulate the link between the landlord and tenant in case of a dispute over residential or commercial lease agreements.

Ejari means “my rent” in Arabic. The registration charge is Dh165. Officials said 500 contracts, residential and commercial, were registered daily on Ejari.

To date, 115,251 contracts have been registered on Ejari, comprising 41,441 commercial and 73,809 residential contracts.

Registration can be completed at any of the 1,200 property management companies or 47 typing centres listed on the website.

The process is available via the online portal, www.ejari.ae, which was established by Rera and made mandatory in a 2010 government announcement.

Landlords and tenants who failed to comply with the registration, and later had a contract dispute, have found that they were unable to enforce the provisions of the agreement because it was outside the protection given by the government authority.

rtalwar@thenational.ae