Dubai Landlords given free hand to charge for tenancy renewal contracts

Tenants planning to renew their tenancy contracts must be ready to get skinned as Dubai landlords have been given a free hand by Rera to charge as much as they want, over and above the mandatory goverment fees.

Current law states that landlords can charge Dhs 160 when renewing tenancy contracts, out of which Dhs 110 is Rera administrative fees and Dh50 is the Ejari registration fees for tenants.

However, in an interview Marwan Bin Galita, chief executive officer of Rera, told Gulf News that property companies can also charge their own administrative fees as long as they are transparent and can be justified to the tenant.

This clearly gives lot of grey area to the property companies and landlords to work in, charging the tenants as much as they would fancy.

Tenants from various parts of Dubai shared their views on this news:

I have been a tenant of Wasl [properties] for the last few years and was not charged any extra costs until now. But when I wanted to renew my tenancy contract, I was charged an extra amount of Dh100 besides the Ejari fees. I do not know if I am legally bound to pay this.

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I paid 5% commission which was Dh1,800 to real estate and after 6 months bldg owner sold bldg to new owner. when time comes for renewal new real estate charge me Dh1,000 comm again. For 4 years most of the tanents have raised this issue, but no action has been taken. now we have new bldg owner and he is not charging anything, but i have lost 4k which i believe wont come back to me. Also, i dont understand admistrative fee and services charges fee in all the deparments. departments web sites never mention these fees in their list. I change my visa I paid Dh5,000 as a deposit aginst my family, i paid Dh150 extra as admin fee and service charges. i also paid Dh10 to bank to deposit my money when i got new visa. i wanted to return my money from bank then again i paid Dh10 to bank to get my money. I still dont understand why all this fees are not mentioned in websites and forms.

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I really don’t know why all of sudden this extra charges started, what is the rent for? and also they are increasing 10% on the rent still we have to pay the admin charges for what?.i have been leaving in this country for so many years. what we earn we pay in house rent here. at some point i will agree but Rera should have a fixed amount if you give a chance to real estate open system they will surely rip you off try to make money with all nonsense explanation. Please think about us. its not at all fare.. can government increase our salaries???…

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This subject always came to my mind and i think Rera should enforce a fixed amount for real estate services rather than the open system allowing many rip off cases. for example, the common system running is that they charge 5% of the contract value as commission, the question is why? If 2 tenants, one is renting a studio in al qusais he went and found it himself looking around for say Dh27000, and another is renting a 5 bedroom villa in palm island he also found roaming around or read an ad in the paper, for Dh260,000 per year, the real estate will charge the first one 5% of 30,000, that is Dh1,500 and charge the 2nd Dh13,000 for providing exactly the same service, which is filling the form and getting it signed. This is unfair. In my opinion the commission or administration fees should be unified and fixed. Say Dh200 per contract, if the tenant went and signed a contract with a real estate to search for him a specific requirement and show him around the suitable short list then it is different and they deserve a service fee. Similarely if the landlord signed with them a contract to manage his property and maintain it on his behalf then they deserve a fee from the landlord. In my opinion the commission being a percentage is unfair and not justified and it should only be in the first year only after which the landlord can sign the contract renew directly with the tenant. If the landlord is not available to sign a contract renewal then he should pay the real estate office to act on his behalf and pay the administration fees.

Since 2012, it is mandatory for Dubai residents to register tenancy contracts with Ejari.