x Abu Dhabi, UAETuesday 25 July 2017

Dubai’s fast-track rent dispute centre to start in December

The centre will aim to process 250 cases per week, with disputes resolved within a maximum of 30 days.

The rent dispute settlement centre aims at processing 250 cases a week, with disputes resolved within a maximum of 30 days. Pawan Singh / The National
The rent dispute settlement centre aims at processing 250 cases a week, with disputes resolved within a maximum of 30 days. Pawan Singh / The National

DUBAI // A fast-track rent dispute centre is due to open on December 1, with an eventual target of processing 250 cases a week.

The centre, to be opened on instructions from Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, will have a maximum of 30 days on resolving disputes.

“Over the past few years, real estate disputes have negatively impacted upon and exhausted the real estate market,” said Sultan bin Mejren, director general of the Dubai Land Department.

“The main concerns have been the slow pace of procedures and the drawn-out process of implementing any recommendations.

“The centre will facilitate greater accuracy, impartiality and transparency when dealing with settlement issues and matters related to Dubai’s real estate market.”

It will comprise 10 committees, eight of which will handle cases of first instance, and the other two appeals.

Initially, each committee will handle five cases a week, with a view to doubling that soon.

The centre will specialise in disputes between owners and tenants. A fee of 2.5 per cent of the annual rent in question will be charged, to be paid by the losing party.

Rents in Dubai have increased significantly despite a centralised index that prevents owners from increasing rents over a certain percentage every year.

Mr bin Mejren said the Land Department would look at ways to keep greater control on prices.

“The rental market is going to be looked at very closely,” he said. “There are going to be improvements and developments with certain laws and regulations that are related to the rental market.

“We are going to look closely at this rental index to see if it is feasible and if the mechanism is right. We will take decisions then on how we can improve it.

“We are going to look at other cities around the world and benchmark certain procedures that are done there, and try to implement them here. This is what Dubai has done in the past.

“All this is with the aim of stabilising the rental market and trying to decrease as much as possible any problems or loopholes that exist.”

Craig Plumb, head of research for the region at Jones Lang LaSalle, said care should be taken when drafting in a system from abroad.

“There is no perfect system,” Mr Plumb said. “There are different approaches adopted in different systems, but none of them are fool-proof.

“The big problem is that, whatever system you come up with, you need to be able to enforce it.

“The whole issue of rent control is a difficult one, because there are people who say you should let the market sort itself out.

“There is recognition that some rental control is a good thing. But whatever system you have, it needs to be as simple as possible.”

Ian Albert, regional director of property company Colliers International, said the current system was good.

“Obviously it could be improved upon,” Mr Albert said. “There are complaints from landlords in fast-moving markets that the rent index falls behind current rents by quite a significant amount.

“But at its core essence, it’s a very good system.”

The new regulations come after the Land Department was given sweeping new powers in Sheikh Mohammed’s decree last week.

Next week it will announce plans to launch another centre to mediate disputes between investors and project developers, in cases where construction on a planned development has stalled.

“When a project has been stalled, this centre will try to broker a settlement between the investor and the developer,” said Mr bin Mejren.

“The court will not take any fees from the investor for going through this dispute.

“If the project will not be able to be continued, this project will be taken back and auctioned out.

“The money from this auction will be returned to investors.”

mcroucher@thenational.ae