When living in a home away from home, it is especially important to know what you’re entitled to as a resident and tenant. Irrespective of whether you just moved to Dubai or have been living there for a while, it really pays to understand the more recent laws which also revolve around overseas voting issues, wills and assets, recent building fires etc.
Here’s a look at some key issues in detail that many tenants have faced or are facing as we speak. Should it happen to you, you’ll be prepared ahead of time and equipped to resolve them without breaking a sweat.
Since the widely publicized Torch Tower blaze at Dubai Marina, it has been revealed that just 6% of UAE home owners have insurance, an alarmingly low number.
It is best to have an insurance plan in place whether you are an owner or living as a tenant. It is the sole responsibility of the owner of a property to have the premises insured; however, as a tenant you might also want to double check that a plan is active. Therefore, make sure you ask the owner to show you the policy schedule.
If a coverage plan is not in action, then you’ll need to insure your own items, as owners are merely responsible for the structure, unless of course, you get a furnished space.
In the event a fire breaks out and the home owner does not have building insurance, the entire responsibility rests on the owner’s shoulders, unless the tenant is to blame for the fire. That leads to legal proceedings, often the basis of a criminal case.
When it comes to apartments for rent in Dubai, insurance works a little differently as one policy is in place for the entire building – all owners contribute to it through a service fee. As for villas for sale in Dubai, if the property you’re moving into is mortgaged, the owner may not need to insure it, though it makes little sense that he wouldn’t. It’s always good to check with a private landlord and do your homework beforehand.
Irrespective of whether you’re living as a tenant or owner, it’s always a good idea to have all your contents insured. Just to reiterate: if you’re living on rent in an unfurnished space, having contents insured is your responsibility, and you’d be wise to do so.
Understanding How ‘Contents Coverage’ Works
There are many companies in Dubai that offer contents insurance cover and it’s crucial that you completely read through the fine print. For instance, not all companies may cover accidental damage. The cost varies according to the value of possessions and how big your space is – a basic plan offering low-level coverage starts at around 300 AED per year.
When you do get a plan, ensure the company is aware that you are the occupant/tenant, and not the owner; many plans are similar for owner-occupant and tenant-occupant coverage, so you need to make sure you understand what the plan’s limits are including the scope of coverage.
When negotiating the terms of the tenancy agreement, it’s important to know who’s paying for what.
For example, the landlord is solely responsible for paying property service fees, though as a tenant, you need to pay the 5% municipality tax from the annual rent (displayed separately on the electricity bill). In some cases, you might be required to pay a contribution of the air conditioning fees if the property does not have an electricity meter individually connected with each unit. And if that is the case, then the charges are levied by the developer, not the power utility service. This is something that largely varies from building to building, so you must clarify this with your agent beforehand.
Usually, your landlord tells you if you need to apply for the Empower district-cooling service. One more thing you must be aware of is the housing fees – this does not necessarily show up on the DEWA bill, so discuss it with your agent or landlord in advance.
When it’s to move out, there is no clear law which dictates who will handle repainting or wear and tear issues. As luck would have it, unfortunately, many landlords will expect you to repaint the space before they put it back on the market. What you can do is have the ‘wear and tear’ clause removed from your contract because otherwise, the landlord will simply not accept a property back which clearly has had wear and tear and, requires repainting. In such situations, the maintenance amount is deducted form your security deposit.
Even in Dubai’s most prized neighborhoods, you might have come across properties where rents have ceased to increase over the last 6 months as the market is in a stabilization phase. However, this hasn’t deterred some landlords who are all but determined to gain the best returns on their investment. Here’s what you need to know on the subject of legal annual rent increases:
Decree No (43) of 2013 states that the landlord cannot raise your rent without prior notice, and what’s dictated in the terms of the contract. If they do, you can file a case with the Rent Committee based on Decree No (26) of 2013. As for the rent increase percentage, that has to comply with RERA’s rent index.
For example, if you’re rent goes up to 10% less than the average rental value of similar housing units, your landlord cannot legally increase the rent. If the percentage lies somewhere between 11 and 20 while keeping the same in mind, then your landlord can legally increase the rent by 5%.
Similarly if your rent is 20-30% less than the average value of similar units, then your landlord can jack up the rent by 10%. Use the RERA Rental Calculator to determine how much the rent should be for any given piece of property and what annual increase the landlord is entitled to. In addition, you also need to check out the RERA rent index system. In any case, a 90 days’ notice from your landlord is due if he/she is planning to increase the rent.
How Ejari Ties into it All
It is required by law that both landlords and tenants get their tenancy agreement registered using Ejari registration online. This is the Arabic word which means “my rent”; the system was introduced to regulate Dubai’s real estate market and is the only document that’s considered a valid proof with regard to the mailing address of your home, for example. In addition, it is also used to register a rental dispute with the Dubai Land Department and obtain and/or renew your residence visa.
Ejari’s use is not just limited to the above – it’s also a valid document that is needed to get a TV or internet connection, obtain a business license, get utilities from DEWA or employ domestic staff. Ejari registration is simple and can be easily completed online for less than 260 AED.
An experienced agent will fight through thick and thin to make sure you get the most favorable tenancy contract. Contact ezEstate today to explore a diverse range of tenancy options.