I live in the UK and own a three-bedroom, 4,200 square foot end terrace townhouse with maids room in the Green Community. I have been letting this to the same tenants for about 10 years. The rent is currently Dh215,000. However, I pay Dh7,992 Emicool declaration load charge and the DEWA surcharge of about Dh800. I have some queries:
1. Should the landlord be paying these two amounts or should it be the responsibility of the tenant?
2. The tenant has informed me that the Municipality has just brought in a housing fee, which is 5 per cent of the annual rent. He has told me that it is the responsibility of the landlord to pay this and demands I pay this money to him. Is this true? If so, should the municipality not invoice me directly?
3. What is the current demand for such properties? My current tenant is threatening to leave if I do not agree to pay these items including the housing fee. He is also refusing any rent increase stating that there is glut of similar villas currently for rent. By how much can I legally increase the rent?
4. What rent should I be expecting if the current tenants do voluntarily vacate? MR, UK
In answer to your first point, I would refer you to your tenancy contract and request that this is adhered to. If there is no mention as to who pays for these charges then I suggest you negotiate with your tenant at the next renewal. There is no hard or fast rule that states who is actually responsible for these charges.
The municipality or housing fee is not new. This has been in place for years and it is collected via the residents DEWA bill. The charge (5 per cent of annual rent equally divided per month) is the responsibility of the resident, so if you rent out your property, this fee is payable by the tenant not you.
According to the RERA rent calculator, the current rent should be between Dh220,000-240,000 and as the current rent achieved is less than 10 per cent of the average, you would not be entitled to any rental increase. The one very important point I wish to say is that any alteration to the contract at renewal, should be communicated by either party giving 90 days’ notice and this would obviously also include the rent. If this window is missed then irrespective of what the RERA rental increase calculator states, there would be no increase allowed by law. The vacant possession rate would be in the region of asking Dh225,000 but the market is cooling a bit so expect to have to negotiate a little.
I signed a non-renewable tenancy agreement earlier in the year, and the time has come to renew. The landlord is now hiking the rent up way beyond the amount allowed by RERA, and has also given me less than three months notice. Is this non-renewal agreement enforceable or am I right in thinking that 12 months notice needs to be issued by a notary? MR, Dubai
Signing a non-renewable tenancy agreement is not recognised by law and this clause cannot be enforced. Any increase in rent on a renewed contract has to follow two simple rules: firstly, the change in rent has to be communicated by either party giving at least 90 days’ notice from the date of renewal. If this window has been missed then no increase is allowed irrespective of what the RERA rental increase calculator says. Assuming the first part above is adhered to then the second part would be to check the RERA rent calculator to see what the allowed rental increase (if any) is for the next year.
If your landlord insists on his points, I would suggest you file a case at the rental dispute committee. They will investigate and show your landlord the error of his ways.
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
The advice provided in our columns does not constitute legal advice and is provided for information only. Readers are encouraged to seek appropriate independent legal advice
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