Question: I am about to purchase a property and the tenant has a two-year lease agreement that started in April 2023.
It also seems the annual rent is quite below the market rate. Can I terminate the agreement giving 12 months' notice by notary public from the date of ownership transfer if I want to move in?
Is that the earliest possible option for a landlord to move into a property? There appears to be no option to increase the rent during the two-year lease. However, are there other options that I could pursue? DB, Dubai
Answer: When a tenant has confirmed a two-year tenancy agreement, you are correct in your assessment that there can be no increase in the rent, as, technically, this can only be confirmed 90 days before the agreement expires.
Therefore, a rent increase could not be communicated until the beginning of 2025.
The only way to potentially increase the rent would be to have a conversation with the tenant to see if they would agree to something more reasonable. My advice would be to do this 90 days before the first-year anniversary of the agreement given that the rent is lower than the market price.
Once you are the legal owner of a rented property, you can send the tenant a notarised 12-month notification of eviction for the reason of moving in yourself or your first-degree next of kin.
After this period finishes, it would be the earliest you could take possession. It is important to note that if you do use this reason for eviction, you will not be able to re-let the property for a period of two years from the date of eviction.
Potentially, there could be a complication with this: If the tenant disputes the notice to vacate, they could lodge a case with the Rent Dispute Settlement Committee and the judge could rule that the tenant not move out until the end of the two-year lease, which would be in April 2025.
This is, of course, not definitive. However, I feel you should keep it in mind as a potential outcome.
Q: I am aware that rents on the Real Estate Regulatory Agency index are calculated based on the number of rooms and where the property is based.
However, what if an apartment consists of one bedroom, a hall, an additional “one single bedroom” and two bathrooms? How do we interpret this, when the single bedroom cannot be classed as a proper bedroom?
How would a rent increase be interpreted on an apartment like this if the Rera index is based on the number of rooms? SU, Dubai
A: A property description is determined by the details contained in the title deed.
In your case, if the title deed states the property has two bedrooms, then this is what the rental calculator will use to determine the rent during renewal of the lease. According to the Rera index, homes with tenants in residence have a lower rent compared with vacant units.
However, if the title deed states it has one bedroom but there is another room, such as a study, which could be used as an additional single bedroom, it would still be regarded as a one-bedroom property only.
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Again, the calculator will state what the rental increase should be based on this description.
If you are the landlord, however, and feel you are missing out on any potential increase in rent given that the title deed states that it is a one-bedroom unit, you can make an application at the Dubai Land Department to alter the title deed.
This would involve a visit to the property by a representative from the DLD. You would also be required to pay subsequent fees to clarify whether it is a flat with one-bedroom plus a study or a two-bedroom unit.
Mario Volpi is the sales director at AX Capital. He has worked in the property sector for 39 years in London and Dubai. The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to m.volpi@axcapital.ae
