Question: I rent a villa in Dubai and the property manager is a real estate company.
Six months before the end of the current lease, the property manager notified me by email saying that future lease renewals would be based on the Real Estate Regulatory Agency rent calculator.
The property manager said they would contact me 90 days before the contract's expiry date to confirm if I wanted to renew the lease.
They did not specify how much the rent would be increased but said that I could check it for myself. At the time, the increase was 15 per cent, according to Rera.
However, the 90-day window has closed as the lease will be expiring in two months' time and they have yet to notify me of the new rent.
I contacted the property manager and told them I want to renew but need to know the new rent.
While I expect them to confirm the rent amount very soon, I believe it will be too late and they have missed the 90-day notification window.
I am also worried that the Rera calculator may now assess the rent higher than the original 15 per cent calculation.
Do you suggest that I raise a dispute or am I likely to lose the case? DV, Dubai
Answer: It is perfectly normal for landlords to inform tenants that there will be changes to the rental amount earlier than the 90-day window.
The Rera calculator's increase of 15 per cent serves as a guide for what the increase could be at the time of renewal.
I would not worry too much about the landlord's lack of communication at this stage, because all you need to do is visit the Rera rental calculator again to see if the increase has changed from the 15 per cent calculation.
The landlord has said that the Rera rental calculator would be the barometer for any change in rent and if it does rise, for example, to 20 per cent, this amount would be legal.
You already know that the increase is at least 15 per cent or, at worst, it could go as high as 20 per cent, so prepare yourself for this eventuality.
If you do not agree with the rent increase, you would have no alternative but to look for another property to rent and move out.
Q: I am staying in one-bedroom apartment and paying a yearly rent of Dh32,000 ($8,713). My contract will be renewed in January 2024 and – until recently – there had been no notification from the estate agent that the rent would be increased.
However, when I visited the estate agent, he said that the rent would be increased to Dh38,000.
I was told by the agent on behalf of the landlord that if I do not wish to renew the lease, I must pay a penalty of 60 days as I have not informed them that I do not want to continue with the contract.
Can you tell me what my legal rights are regarding this? Also note that my contract states that I must pay Dh1,000 to renew the contract, which I am willing to pay. AI, Dubai
A: There are a few points to consider here. Firstly, any changes to a contract can only happen when at least 90 days' notice has been given and all parties must agree to them.
When the lease changes apply to the rent, any increase can only be allowed if the Rera calculator allows it, so you would need to check that this is the case.
You should also note that under property law 33 of 2008, you are not required to give notice that you will not renewing the lease.
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This is because your rental contract has a start and an end date, so despite the 60-day notification clause in the renewal contract, you can dispute this by filing a case with the Rent Dispute Settlement Committee in Deira, Dubai.
Ultimately, if you do decide to renew and are OK with an increase in rent, then you would have to pay the renewal fee of Dh1,000.
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
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The specs
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Key changes
Commission caps
For life insurance products with a savings component, Peter Hodgins of Clyde & Co said different caps apply to the saving and protection elements:
• For the saving component, a cap of 4.5 per cent of the annualised premium per year (which may not exceed 90 per cent of the annualised premium over the policy term).
• On the protection component, there is a cap of 10 per cent of the annualised premium per year (which may not exceed 160 per cent of the annualised premium over the policy term).
• Indemnity commission, the amount of commission that can be advanced to a product salesperson, can be 50 per cent of the annualised premium for the first year or 50 per cent of the total commissions on the policy calculated.
• The remaining commission after deduction of the indemnity commission is paid equally over the premium payment term.
• For pure protection products, which only offer a life insurance component, the maximum commission will be 10 per cent of the annualised premium multiplied by the length of the policy in years.
Disclosure
Customers must now be provided with a full illustration of the product they are buying to ensure they understand the potential returns on savings products as well as the effects of any charges. There is also a “free-look” period of 30 days, where insurers must provide a full refund if the buyer wishes to cancel the policy.
“The illustration should provide for at least two scenarios to illustrate the performance of the product,” said Mr Hodgins. “All illustrations are required to be signed by the customer.”
Another illustration must outline surrender charges to ensure they understand the costs of exiting a fixed-term product early.
Illustrations must also be kept updatedand insurers must provide information on the top five investment funds available annually, including at least five years' performance data.
“This may be segregated based on the risk appetite of the customer (in which case, the top five funds for each segment must be provided),” said Mr Hodgins.
Product providers must also disclose the ratio of protection benefit to savings benefits. If a protection benefit ratio is less than 10 per cent "the product must carry a warning stating that it has limited or no protection benefit" Mr Hodgins added.
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Types of policy
Term life insurance: this is the cheapest and most-popular form of life cover. You pay a regular monthly premium for a pre-agreed period, typically anything between five and 25 years, or possibly longer. If you die within that time, the policy will pay a cash lump sum, which is typically tax-free even outside the UAE. If you die after the policy ends, you do not get anything in return. There is no cash-in value at any time. Once you stop paying premiums, cover stops.
Whole-of-life insurance: as its name suggests, this type of life cover is designed to run for the rest of your life. You pay regular monthly premiums and in return, get a guaranteed cash lump sum whenever you die. As a result, premiums are typically much higher than one term life insurance, although they do not usually increase with age. In some cases, you have to keep up premiums for as long as you live, although there may be a cut-off period, say, at age 80 but it can go as high as 95. There are penalties if you don’t last the course and you may get a lot less than you paid in.
Critical illness cover: this pays a cash lump sum if you suffer from a serious illness such as cancer, heart disease or stroke. Some policies cover as many as 50 different illnesses, although cancer triggers by far the most claims. The payout is designed to cover major financial responsibilities such as a mortgage or children’s education fees if you fall ill and are unable to work. It is cost effective to combine it with life insurance, with the policy paying out once if you either die or suffer a serious illness.
Income protection: this pays a replacement income if you fall ill and are unable to continue working. On the best policies, this will continue either until you recover, or reach retirement age. Unlike critical illness cover, policies will typically pay out for stress and musculoskeletal problems such as back trouble.
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Engine: 5.0-litre supercharged V8
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Sector: e-commerce
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West Asia rugby, season 2017/18 - Roll of Honour
Western Clubs Champions League - Winners: Abu Dhabi Harlequins; Runners up: Bahrain
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Company%20Profile
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Key facilities
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- Engine: 3.9-litre twin-turbo V8
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- Price: Not announced yet
