The UAE Tenants Guide: Part I

A new year started and temperatures have dropped a lot in the last couple of months, but so did the rental prices throughout the city. In fact, the rental prices for residential units have seen a remarkable decline since early 2018, as the property market currently has an overabundance of completed and vacant residential units throughout the region.

The steady decline in the rental pricing over the last year and a half, does not necessarily mean less property transactions. Actually, it causes a shift in the property market especially for UAE residents, offering a better chance to everyone and more access to affordable housing. It means that  a remarkable number of residents will decide to stop sharing accommodation and finally move to an independent unit, and for those families who are still living in studios or one bedroom apartments will decide to upgrade to bigger spaces. Those who tirelessly commuted between neighboring Emirates for work, will also decide to move closer to save time and gain a better quality of life. Those who are seeking a switch to a house as they have had enough of the busy skyscrapers or looking to secure a garden for their pets will probably decide now to upgrade to a villa or a townhouse.

Who you should contact to look for a property in the UAE?

The UAE regulatory authorities have done quite a remarkable job over the past ten years to secure qualified professionals and qualified / registered Real Estate Brokers and Brokerage companies to practice such business. These brokers and companies have gone through a series of Police Department background checks to establish their good standing, courses and examinations to secure their position as real estate agents in Dubai and are considered regulated professionals that you may contact on your quest to find your property.

These professionals and registered brokerage firms can be easily identified by their license and ID Cards that can be also easily verified online. It is your personal obligation to make sure the professional or the firm you are dealing with are in good standing. Such request would seem offending only to non-registered and non-qualified people. Make sure you deal with diligent professionals because this will reflect directly on your experience.

How to make sure you are renting from the correct landlord?

In the capital Emirate Abu Dhabi, Abu Dhabi City Municipality (“ADCM”) issues Ownership Deeds for properties while in the Emirate of Dubai, the Dubai Land Department issues Title Deeds as proof of ownership.

The Ownership Deed and the Title Deed verifies the full name of the current owner of the property. So, when renting properties in Abu Dhabi – a quick visit to the ADCM will confirm the property’s owner by verifying the genuine Ownership Deed. In Dubai, it is recommended for the tenant to request to see the original Title Deed for verification, but this information can also be obtained online via: www.dld.gov.ae

What is the most common list of documents you should ask to see when you are renting a property?

A. Documents from the brokerage and individual broker:

1. Obtaining the commercial license of the Real Estate Brokerage firm. You can verify the company’s good standing through the website of the Economic Department in Abu Dhabi, and in Dubai via: ded.gov.ae and www.added.gov.ae.
2. Obtaining the Real Estate Regulatory Agency (“RERA”) membership card of the broker you are personally dealing with.
   1. Real Estate Brokerage RERA membership can be confirmed by accessing their company license and its good standing via: dubailand.gov.ae
   2. Individual agents RERA memberships can be verified via: dubailand.gov.ae

 B. Documents you should request for the property:

1. Title Deed (i.e. proof of ownership);
2. Copy of the landlord(s) passport, UAE visa and Emirates ID (if he does have one)
3. Dubai Electricity and Water Authority (“DEWA”) registration number. This will be required at a later stage when you activate your water and electricity connection with DEWA; and
4. The draft for rental agreement. This document must be read front to back and thoroughly scrutinized clause by clause before signing, as the tenant will be bound by each of the articles signed. Should you have any questions or concerns with any of the terms contained in the agreement you should seek legal advice before signing.

What are the most important things you should do and most important questions you should ask?

1. You should never agree to rent a place based on photos alone. You must physically check the unit for any defects, as by signing the contract you will confirm and acknowledge that you have seen and inspected the unit and you agree to rent it as per its current conditions.

Despite many promises that you may get from the real estate agent or the landlord for fixing broken tiles, wood and non-functioning appliances, you may find yourself in position where the rent has been paid, you are ready to move in and you have paid the landlord the security deposit and given him the cheque guarantees for rent and you are left with a faulty AC, doors that have no locks or windows without glass.

2. You should never pay rent without receiving a physical receipt or proof of payment such as a banker’s check.

What should you check and verify if you are renting a furnished unit?

To ensure you will not face any issues with the apartment after moving in, it is highly recommend to check the following:

1. The apartment walls have been repainted;
2. The Air-conditioning (AC) unit has been cleaned;
3. All doors and windows open, close and lock properly, and you are in possession of all the keys to the apartment;
4. Inspect the apartments ceiling. You, may ask ‘why’ but it is actually one of the most important points to note. If the building is old and/or the previous tenant was not taking care of the property, there may be signs of black mold spores growing. This typically occurs near the AC vents, windows and balcony doors and is caused by the fluctuation in temperature when tenants leave the AC unit running whilst having doors and windows open.
5. Inspect the bathroom for mold growth around bathtub, sink and floor; and
6. If the apartment is partial of fully-furnished, inspect the condition of the furniture to insure they are in good standing and all appliances are in working order.

Checking the above mentioned prior to moving in will save you time and money because the standard Addendum to the Tenancy Contract strictly mentions that any maintenance work less then AED 500.00 will be paid by the Tenant.

If it happens that you  love an apartment that needs some minor improvements:

1. Discuss this with your real estate agent and/or landlord before signing the tenancy contract to reach an agreement on the maintenance before moving in;
2. Take pictures of all areas in the apartment that are not in mint condition (i.e. broken tiles, cracks in walls, rust, carpet stains, etc.);
3. Do not sign the Tenancy Contract and/or pay rent before the issues are agreed in writing or fixed and personally inspected.; and
4. When paying the rent deposit, make sure you are not being over charged as RERA has a fixed rent deposit price of 5% for unfurnished and 10% of the yearly rental amount.

Lastly, before signing the Tenancy Contract make sure you ask the real estate agent and/or landlord if the building is Chiller Free or you have to apply for Chiller service.

If your apartment is not Chiller Free then the tenant will be responsible for the AC connection. In order to connect your apartment with AC, you will have to submit a Chiller Cancellation Form (signed by landlord with cut-off date) with the company providing the Chiller services in your building, along with the tenants and the landlords rental documents (i.e. passport, visa, EID, Tenancy Contract and Ejari) to the Chiller Company's offices within 24-hours, the provider responsible for AC will calculate the final bill for your landlord. Once the landlord has cleared the outstanding account, the Chiller Company will accept the tenant’s application and security deposit and the End User’s Agreement can be signed by tenant and landlord.