UAE Property: ‘Can an agent demand a gift for negotiating rent?'

Question: Our real estate broker wants us to pay a full year’s rent before providing us with a signed tenancy contract . Is this normal practice in the UAE, because this is not how it’s done in the UK? The broker also said he wants a gift or cash for negotiating the price I asked for. I’m not happy with these demands. LC, Dubai Answer: Many agencies operate in different ways. What is normal would be for the broker to get both the tenant and landlord together to arrange the collection of cheques (rent, deposit and commission) and to sign the contract. If this is not possible, the order of proceedings would be to get the tenant to sign first and then deposit the cheques with the broker. The broker would then give the cheques to the landlord once they have signed their part of the contract. Handing over the rent cheques to the broker before getting the contract signed is not risky as long as they have confirmed receipt and all parties have agreed to how everything will be handled. Different countries have varied ways of doing business, but as long as the paperwork, receipts and proceedings are adhered to, it can work in multiple ways. With reference to the gift or cash request from the agent, this is not normal. Presumably, you are paying the statutory 5 per cent plus VAT commission to the agency. That said, if you feel that the agent warrants a present or an extra something, then by all means, this is up to you, but it is not necessary to give them anything. Q: My landlord sent me an email 100 days prior to my rental contract expiry that he plans to increase my rent. This was a very generic email and did not include specifics such as how much the rent would be increased. After almost two months since receiving that email, 38 days now remain until my lease expires. My landlord has now informed me through another email that he would increase my rent by 20 per cent, according to the Real Estate Regulatory Agency’s rental valuation certificate. Is my landlord allowed to increase the rent if he informs me of the new amount only 38 days before lease renewal? NN, Dubai A: Technically speaking, as long as the landlord has informed you of the proposed changes 90 days prior to the expiry of the tenancy contract, he is allowed to then go ahead with these changes, provided they are permitted according to the Rera rental calculator and/or the valuation certificate in terms of rental payments at the time of renewal. I realise that not specifying the actual amount of rent increase 90 days prior to lease expiry seems to defeat the purpose. But, technically speaking, the changes can still go ahead at the time of renewal because the notice was given, although not specified. Q: I have been renting an industrial unit in Dubai for the past seven years. The landlord is now asking for an increase in rent through email but is not disclosing the amount. Instead, he wants me to go to their office to discuss the matter. The landlord has also passed on the Dubai Real Estate Corporation’s sub-lease fee of 20 per cent of the annual rent plus VAT to me. Can I go to the DREC or Rent Dispute Settlement Committee to find a solution? ZA, Dubai A: There is no harm in going to the RDSC to get more information for your specific case. If they believe the landlord is being unreasonable, they can advise you on how to file a case, which will then be put in front of a judge. The laws are clear as to what increases are allowed, but when it comes to sub-leasing, you will have to get legal advice as the laws do not cover this in great detail. Mario Volpi is the sales director at AX Capital. He has worked in the property sector for 40 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