The message is clear! Only deal with a Registered Broker / Agent.

Only a resident of Dubai can sign a lease agreement and connect the utility services.

For Tenants and Landlords in Dubai need to be aware that RERA is now regulating the relationship between Landlords and Tenants. The new Law No. (26) of 2007 which was recently released, is applicable to leased properties in the Emirate excluding free accommodation provided by natural persons or judicial persons to their employees.

The tenancy must be governed by a written tenancy contract agreement with all the relevant information and must be registered in RERA by Law otherwise, neither party may assert a claim if a dispute should arise. The new Law is fair to both the Landlord and the Tenant and should be read by both parties as both are legally bound by the Law. The Law defines the scope of implementation of the Law and also details chapter articles relating to:

• Obligations of the Landlord
• Obligations of the Tenant
• Eviction (i.e. Tenant removal)
• General Rules
• Final Judgements

Dubai property investors need to be aware of some minor changes in the process of leasing and renting Dubai properties.
From January 1st, 2008 rental cap has been set at 5%. This means that Landlords may not increase the rent higher than 5% of the existing rental agreement for a period of 2 full years starting form the period of the commencement of the lease.
Rent in advance for tenancy agreements in Dubai, is four equal installments (quarterly) paid in advance or as otherwise determined on the lease agreement.
From January 1st 2008, all new leases for the New Dubai project areas must be registered with the Real Estate Regulatory Agency (RERA)
When using a Broker or Agent, they must hold the Broker’s Register Registration ID Card. Their office must first be licensed to perform the real estate renting or property management service to Landlords and Tenants by the Department of Economic Development. This is a special activity permit and separate from sales license to provide the rental and management service.
The Services range from finding and presenting a suitable tenant to the Landlord, executing a Rental Agreement Contract, and/or Property Management service for a renewable contracted period, or assisting tenants to seek suitable rental accommodation.

In Dubai, Tenants seeking a rental property, pay the Agent 5% of the annual rent amount. This is the service fee to the Agent. This is payable upon signing a rental contract agreement. A wise tenant will seek a number of Agents out, meet with them, discuss their needs, and then decide which Agent they have the most confidence, feel impressed by their level and standard of service and have access to a range of suitable properties or are prepared to go that extra mile and locate a rental property for the tenant/s.

Tenants once decided on their preferred Agent, should sign a Standard Form (D2) to Appoint their Rental / Leasing Agent. It is recommended that a maximum of three (3) agency appointments should be made and when the Tenant has secured a lease which meets their needs, they should advise the other two Agents immediately.

Landlords also need to sign a Standard Form (D1) to appoint an Agent to look after their property and find a suitable tenant. This service is negotiable and flexible. We have elaborated further on this below.

In Dubai, when on a visit visa, a tenant cannot sign a fixed term tenancy agreement. There are however, some Registered Brokers who have access to ‘short-term lease accommodation’. This can be rather expensive as there is short supply, and the turnover of tenancy often creates a high wear & tear on the property with the Owner absorbing the additional fees and charges. Never use an unregistered Broker for short-term lease accommodation. These back-yard operators will take your money up front and are gone when it comes time to address a problem where immediate attention is needed – which sometimes occurs 24 hours later! When you use these unlicensed operators, there is no assistance from the Real Estate Regulatory Agency.