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Dubai: As rents in Dubai skyrocket and demand for housing increases, rental agreements for a longer term were hailed as a welcome move by tenants, with the potential to bring stability to the market. The proposed three to five-year rental agreement, set up to tackle rising rents in Dubai and currently being finalised by the Real Estate Regulatory Agency (Rera), was described as a positive step towards clearer tenancy rights. Briton Paul Sherlock said that he would even consider moving back to Dubai from Sharjah if such an agreement came into effect. "In Sharjah, the situation is such that as long as your tenancy agreement is registered with the municipality, you are safe for three years, then you can re-negotiate. But ... five years would be great," he told Gulf News. Predictability
More consistency and predictability in the cost of housing would allow people to budget properly and not constantly brace for the next major hike in the rent, said Sherlock. According to the project manager and member of Gulf News Readers Club, clearer guidelines on breaching contracts also need to be redressed. "There is still quite a lot of grey area but overall it is a great move." An Iranian marketing manager in his thirties, Amir Shafaat, who resides in Shaikh Zayed Road, said that as long as the situation is "fair and square" for both parties, the proposed agreement for a longer term would be a welcome initiative. "As a tenant, I would be very interested as long as it was subject to fair details and notice period." Murtaza Shamsi, an Indian and member of Gulf News Readers Club, said that current one-year rental contracts automatically give landlords the ability to increase the cost of the property. "With a three-year agreement, it will give people the ability to plan and it is much fairer." Filipino Reg Cucal, who works in the aviation industry, is all too familiar with the pitfalls of the rental market. Living with his family in the same apartment for five years, he was recently forced to vacate as the building was scheduled for demolition. Cucal says he would be more secure if he had been able to sign a three to five-year contract.
Your comments
It seems the situation will get better but it depends on which base these 3-5 year long contracts are going to be drafted. Is there going to be an updating formula included or it is going to be fixed for 3-5 years? There is one thing certain and that is the fact that these yearly rents are not fair at all, especially for those who are receiving a fixed salary.
Abbas
Dubai,UAE
Posted: August 23, 2007, 15:13
When the 7 per cent cap was introduced with landlords not being able to raise the rent if they had done so the year before, my landlord raised the rent anyway, even though he had raised the rent by 15 per cent the previous year. When I mentioned the decree I was told that there was no dearth of people waiting to pay what I was paying for a 2-bedroom apartment. Perhaps it is time punitive measures were introduced for landlords flouting the decree - that is if Rera REALLY wants to do something about the spiralling rent situation in Dubai.
Richard
Dubai,UAE
Posted: August 23, 2007, 14:43
I am about to come to Dubai for work and the rental situation of property is really something I worry about. In all honesty, everything seems unstable from either point of view. I hope that some stability can be found with this move.
MGM
Manila,Philippines
Posted: August 23, 2007, 14:01
The 3-5 year agreements are fine, but what about beyond that period? Does the landlord hold the right to hike up prices as much as he wants for another 3-5 year contract?
Jaideep
Dubai,UAE
Posted: August 23, 2007, 12:26
No matter what the Real Estate Regulatory Agency has to say, landlords will increase the rents as per their wish. If the tenants revolt they ask them to vacate within a year. Tenants have no option but to accept it.
Melvin
Dubai,UAE
Posted: August 23, 2007, 10:52
Don't spread false news that residents are welcoming long term agreements. Property market is crashing and the tenants will not get benefit of falling rents. I do not agree to long term agreement.
Patel
Dubai,UAE
Posted: August 23, 2007, 08:55
Well, I don't know how far this system will be effective. Landlords find their way out to make their money. I have lost hope and trust in the system.
Jason
Dubai,UAE
Posted: August 23, 2007, 08:36
The rents in Ajman and Sharjah has really spiralled, reason being the rush from Dubai and the opening of the Emirates Ring Road. It is high time the Govt took control of the situation which is very grave. If a 5-year agreement comes into force, it will be a blessing.
Jim
Ajman,UAE
Posted: August 23, 2007, 08:16
Being an expat in the country I strongly support this move of bringing 3-5 years tenancy contract. It's a good move and it helps me in planning out my other activities.
Ghouseuddin
Dubai,UAE
Posted: August 23, 2007, 07:58
It?s an excellent news for the tenants as they can feel relax for 3-5 years once agreement is done. The rent increase ceiling should also be clearly defined and the authorities should grade the residential units based on locality, amenities, building age, room sizes etc. and rents should follow the grading system. Further, forced evacuation on the name of "Renovation/Refurbishment" should be stopped.
Nayyar
Dubai,UAE
Posted: August 23, 2007, 07:35
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