What are all of the costs involved if I renew my rent in Dubai?

A common question often asked is - what are all of the costs involved if I renew my rent in Dubai?
 
1. The Rent Amount - the amount agreed for your annual rent. This amount is negotiated between the owner of the property and the current tenant. You should also always refer to the latest updates from the Dubai Land Department (https://dubailand.gov.ae/en/news-media/the-rental-increase-calculator-is-an-innovative-solution-for-the-real-estate-market/#/) which will have the most up to date information regarding how much the rent can be increased.
 
Currently, below are the guidelines for how much rent can be increased:

• If the rent is 10% less than the market value, there is no increase
• If the rent is 11-20% lower than the market value, the maximum increase may be up to 5%
• If the rent is 21-30% lower than the market value, the maximum increase may be up to 10%
• If the rent is 31-40% lower than the market value, the maximum increase may be up to 15%
• If the rent is lower than 40% or more of the market value, the maximum increase may be up to 20%

2. The renewal for the Ejari. Ejari is the Arabic word for rent. The Landlord is responsible for renewing the Ejari registration however in practise this is more likely to be done by the Tenant, who are responsible to pay the Ejari charge. The Ejari certificate and registration are done online through the Ejari portal or at a Government office and the cost does vary depending on method of registration. At Exclusive Links Real Estate Brokers in Dubai we advise clients the cost will be no more than AED 230. The purpose of the Ejari certificate is to formally register the tenancy contract and to protect the owner and the tenant. This document is a necessity as you cannot apply for your utilities without presenting your Ejari certificate.
 
3. Administration Fee. There may be a clause in your tenancy contract for the Agency charge should they assist with renewing the contract. Agents are not permitted to charge the Agency Fee of 5% however a nominal admin charge may be applicable and an industry-standard would be AED 1000.
 
4. Housing Fees. This is paid monthly over a 1-year contract and is charged as part of your monthly DEWA bill. It is 5% of the annual rent. So for example, if your annual rent is AED100,000 the housing fees reflected monthly on your DEWA utility bill would be AED416.67 (AED100,000 x 0.05%, and then divided by 12 months).
 
5. Maintenance Fees. For maintenance issues within the property, review the clause in your contract to confirm responsibilities. Generally, small wear and tear items and consumables are the Tenants responsibility and larger more costly maintenance defects would be charged to the Owner.
 
It is a good sign when you want to renew your rent, not only does it mean that your house has become your home, it allows you to make the space more personal and more 'your own'. It will also allow you to build up a relationship with the landlord, which is mutually beneficial.
 
We recommend you discuss with the owner of the property, upon each renewal, and check-in with them as to what their future plans for the property are. Although they may not always be forthcoming with the information, they may also advise you that they plan to sell their property after a year, or plan to live in the property themselves in the future.  That's why I'm in the opinion to always be open, honest and transparent with your landlord.
 
One last piece of advice, should you wish to amend any of the terms of the contract for renewal, it is required for you to request this to the Landlord, in writing, at least 90 days before expiry. While there is no law regarding the notice period in the event you wish to vacate, you should review your contract terms as a time frame may be required or a penalty may be applied for insufficient vacating notice. The Landlord will need time to explore the option of getting new tenants and/or plan to do any maintenance required for when the property is vacant.
 
Should you have any questions, please don't hesitate to reach out to me, I am always happy to give advice or assist you with your next rental.

Written by:
Linda Williams
Client Manager - Exclusive Links
Mobile No: +971528674545
Email: linda@exclusive-links.com
Broker no.: 28199
29th July 2021