Renting a place to stay

Dubai: If you have just arrived in Dubai you will be looking for a place to live, and will no doubt have heard nightmare stories about skyrocketing rents and property inflation in many areas.

With villas and apartments in central locales of Dubai and Abu Dhabi out of reach of many, residents are increasingly opting to live in areas such as Sharjah, Ajman and even Ras Al Khaimah.

However, wherever you decide to live, it is best to be prepared by keeping your wits about you, keeping fraudulent agents at arm’s length and checking our tips to finding a decent home.

The first thing to know is that rent is paid on an annual or biannual basis with post-dated cheques.

An advance payment is required which can put new tenants out of pocket, but housing loans are readily available from banks. Some companies also pay the landlord directly and direct debit monthly payments from your salary.

International cheques are not accepted and so opening a local bank account and getting a cheque book are prerequisites.

If a cheque bounces, due to minimal funds in an account or a month of particular heavy duty spending, you will be seriously penalised and can result in a jail term.

There are additional costs to be considered such as the real estate commission which is five per cent of the annual rent in a one off payment. There is also a maintenance charge and the municipality tax which are both an additional five per cent each of the annual rent. Add to this the refundable rental security deposit.

Once you have found a house or apartment that you like you can try and negotiate the rent and terms.

Fine print

Paying the lease in one cheque or signing for a long term lease could bring down the rent. If you are happy with the price, sign the lease and read the contract thoroughly, especially the small print so you are aware of lease termination, subletting, or damage to the property. Only once you are happy with all the clauses should you hand over the cheques.

At the end of 2006, in Dubai the 15 per cent rent increase rule on rents will come to an end. New tenants do not often benefit from this but all renewing tenants should make sure that landlords have not increased rents more than this. If so you can direct your queries to the Rent Committee at Dubai Municipality.

In Sharjah landlords are not allowed to raise rents within three years, and if it happens, then residents can complain to Sharjah Municipality at the Rent Dispute Committee.

In Abu Dhabi complaints have been made about real estate agencies that charge non-refundable fees, normally Dh100, just for showing properties to their clients. Some agencies charge Dh200 for showing properties. If the apartment hunter is happy with the property and concludes an agreement, he or she has to pay a month rent as a commission to the real estate agency.

In Abu Dhabi, another problem is unchecked hike in rents. Tenants should also be aware of demands for huge one-off fees known as “key money” which often involves the purchase of poor quality old furniture before tenants can move into properties.

Useful information

What to bring when leasing a house:

 - Residence permit (copy) 
 - No objection letter from employer 
 - Salary certificate 
 - Rent cheque or cheques for the leasing period 
 - Deposit 
 - Real estate commission 
 - Your company should provide you with a copy of their trade licence 
 - Passport copy of person signing the rent cheque from your company. 
 - Termination and demolition 
 - When moving out you may be asked to return the property
in its original state, despite having made improvements or changes, which you also may not be compensated for. 
 - Before signing your contract for an older property be sure to check that there are no plans for demolition.

Housing tips

Industry experts have advised Dubai residents to take strict precautions when renting property, to mitigate the risks.
“There are irresponsible players in every market, and the importance of exercising due diligence cannot be stressed enough,” said Andrew Chambers, Managing Director of Asteco. “Prospective tenants can take a number of precautions when buying or renting property with a minimum of fuss.”

Make sure you:

 - Visit Dubai Property Group at www.dubaipropertygroup.com. It has a list of member companies that adhere to the group’s code of ethics.

 - Check the agency’s reputation and whether they have a website.

 - When dealing with a broker, ask to see the power of attorney from the owner.

 - Check with Dubai Municipality for the plans that name the owner of the property when issuing cheques in his/her name.

 - Keep in mind that only companies that have paid a substantial bank guarantee are entitled to take cheques in their name.

REAL ESTATE SECTION: Buying property in Dubai

Articles:

• Realty agents under lens: (Gulf News 22nd January 2007): People shopping for property in Dubai may breathe a little easier once a new programme, aimed at weeding out unqualified real estate agents, goes into effect tomorrow. The Dubai Land Department is taking a closer look at the qualifications of real estate agents and firms operating in the red-hot property market.....

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