UAE Property: ‘Does the Rera rent index apply to furnished apartments?’

Question: We rent a new furnished apartment in Dubai. Most residents are coming to the end of their first annual contract and have been informed of a 10 per cent to 15 per cent rent increase . However, the Real Estate Regulatory Agency calculator for the area states that no rental increase is permitted. The developer claims that because the units are furnished, the Rera index does not apply. But the units are regular apartments with standard lease contracts, Ejari and deposit. Is this interpretation of the rental laws correct, or are we within our rights to refuse the rental increase? TB, Dubai Answer: It is true that the Rera rental calculator does not take into consideration whether a unit is furnished or unfurnished. However, what the landlord is saying is not correct. Therefore, to try to get to some common ground, I suggest the landlord uses the Dubai Land Department rental valuation service. This will then go some way in readdressing the discrepancy in rent, despite what the rent calculator says. Once this has been done, Decree 43 of 2013 will take over and this will decide the actual amount the landlord can ask for at the next renewal. It is important to note that the amount cannot be more than a 20 per cent increase in any one year. However, if after all this, you still do not agree with the increase, you are at liberty to contest it through the Rent Dispute Settlement Committee and let the presiding judge of the day settle the difference of opinions. This will cost you 3.5 per cent of the current rental amount. If you win the judgment, the costs are often added to the claim. Q: I own studio apartments in Dubai. I understand that the service fee we pay also covers the building and unit insurance. Do owners still need to take out separate building insurance for their apartments? I know content insurance is the tenant’s responsibility. AP, Dubai A: If you have building insurance covered as part of the service charges and you have written proof of the same, then you do not need any additional building insurance. Check the policy to see exactly what is covered under the terms and conditions of the policy. If it isn’t as comprehensive as you would wish it to be, you can then have a conversation with the managing company or owner’s association to rectify the situation. Q: We have lived in a compound in Dubai for 12 years. A neighbour moved in nearly two years ago. Although there were no issues in the first year, he annexed the entire section of common property for his personal use. The common property is a shared portion of ground abutting both our outdoor terraces. The management decided to split the area, with this person still being afforded the right of personal use and our section to remain as common property. We endured months of harassment, with the tenant shaking our gate, their light bulbs glaring through our lounge windows until 1am, and their furniture and barbecue piled up in front of our house. We called the police and were even forced to install a high fence. In December 2023, the tenant said he wanted to erect a 1-metre-tall fence. The management refused and asked him to adhere to his boundary. The tenant refused to accept this and has repeatedly requested more space from the management. I wrote to the Dubai Land Department last week and got an unsigned response to approach a lawyer. We feel our right to the peaceful enjoyment of our property with an unobstructed view has been disrupted for more than a year. CK, Dubai A: Your only recourse would be to take the neighbour to court, especially if the management company has not intervened up to this point and the police cannot deal with it due to it being a nuisance case rather than breaking the law. I advise you to consult a lawyer and file a civil case. You clearly have enough evidence to hopefully win compensation or satisfaction over this stressful time. I’m dumbfounded that the managing company cannot deal with tenants in a fair manner that takes all considerations to hand. Mario Volpi 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 mariovolpi64@gmail.com