Dubai Forums Dubai Discussions Dubai General Chat

From Gulf News;

Dubai: The Dubai government has capped the annual rent increase at a maximum of seven per cent on all rental properties as of January 1.

His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, issued a decree yesterday saying the rent increase will not exceed seven per cent of the annual rent of the property, WAM reported.

Dubai was the first emirate in the UAE to introduce a rent cap in November 2005, when Shaikh Mohammad issued a decree capping the increase at a maximum 15 per cent of the annual rent. That decree ended on December 31.

At least this is good news for the New Year.

What are your comments?

WOOOOO HOOOOOOOO!!!!!!!

Good news, even if it's a little late in coming. Market pressures will probably ease rents this year anyway, but it stops prices getting out of control in popular areas. Now all they need to do is have a tough system on landlords trying to avoid the system and all is sorted.

Hubby just called me and told me the news! I think it is great that the rents will be capped at 7%. There are a lot of unhappy landlords today.

It is great news - but without wanting to put a downer on things. That means all property will rise by 7% still?

jabbajabba wrote:It is great news - but without wanting to put a downer on things. That means all property will rise by 7% still?

Not necessarily, if you are already in a property and your rent was raised during 2006, then they cannot raise it at all within 2007. The only time control is lost will be when the property is actually vacated.

No, not necessarily. At the moment it has been increasing at about 40% since last year. Those who had enough documentation could take their landlord to court to get the new contract set at the 15% (and now 7%) rental increase cap. It is the people just moving into new places that have the problem because the rental amounts are higher. For example, some people have renewed for a 2 bedroom villa at 15% increase for about 95-98,000 AED, but new people moving into a villa for the first time have to pay 130,000 AED for the same villa at the moment, because the landlords increased the rents as much as they wanted after their tenants moved out. So basically, you can only take advantage of the rent cap in subsequent years of living in the same place. This is why landlord are so busy trying to evict people - so they can raise the rents in excess of 40%. Having said this, lots of new apartments and villas are coming onto the market soon, so that could drive rents down as landlords fight to get people to move into their places since there will be so much available and they don't want their apartments and villas sitting empty. This could drive rental prices down. I personally think only apartment rents will come down, not villas.

kanelli wrote: I personally think only apartment rents will come down, not villas.

+1

kanelli wrote: I personally think only apartment rents will come down, not villas.

Yup, expect apartments to be the main driver of the decrease. Villas will follow at a slower rate only as people realise they could have a 2 bed villa or a bigger 3 bed apartment at the same price and move. There are some more villa complexes in the pipeline but they won't be as quick or as numerous to make too much of a difference, rather just soak up the general population increases.

A very good rule for the start of the year

Hehe, people sem to forget that rents will still RISE either way, with no annual 7% increase in salary.

And there is a lot of talk about tons of new property coming online. What's out there besides International City that is affordable and coming online this year? The overpriced cubicles at Marina?

MaaaD wrote:

kanelli wrote: I personally think only apartment rents will come down, not villas.

+1

+1

Also another issue which we've just run into. The lease ran out on the 31st December, so of course all the contracts were resigned and everything before that date, with the 15% increase. I doubt very much that any landlord will go back and redo the contract according to the new rates.

Chocoholic wrote:Also another issue which we've just run into. The lease ran out on the 31st December, so of course all the contracts were resigned and everything before that date, with the 15% increase. I doubt very much that any landlord will go back and redo the contract according to the new rates.

Surely though this would be an issue for the Dubai Municipality Rent Committee.

Yeah, if you've got a spare 7,000Dhs to take your case to them. Not worth it.

Chocoholic wrote:Yeah, if you've got a spare 7,000Dhs to take your case to them. Not worth it.

if you win your case (as you would) the money is refunded. Don't give in.

gtmash has hit the nail on the head - its still another 7% increase against a static salary for most.

I am probably about to steer things off-topic , but where is the next new Dubai then for a decent salary and a low living price? As i seem to have totally missed the boat turning up here at the end of 2006

We've been to the rent committee and it was excellent. Our landlord lost the case in 5 minutes flat.

sage & onion wrote:

Chocoholic wrote:Also another issue which we've just run into. The lease ran out on the 31st December, so of course all the contracts were resigned and everything before that date, with the 15% increase. I doubt very much that any landlord will go back and redo the contract according to the new rates.

Surely though this would be an issue for the Dubai Municipality Rent Committee.

Didn't the the 15% still apply up to Dec 31st?

kanelli wrote:

sage & onion wrote:

Chocoholic wrote:Also another issue which we've just run into. The lease ran out on the 31st December, so of course all the contracts were resigned and everything before that date, with the 15% increase. I doubt very much that any landlord will go back and redo the contract according to the new rates.

Surely though this would be an issue for the Dubai Municipality Rent Committee.

Didn't the the 15% still apply up to Dec 31st?

If you read the newspaper articles, it seems there is a clause for housing where the majority of the period of rent is 2007, I think Choco has a good chance at getting the increase reduced to 7% should she wish to follow up.

Chocs, check out today's Emirates Today and stick it to the man. Good luck.

Yeah, we're going to do that. Our landlord has always been quite reasonable, particularly if you make the effort to go and talk to him in person.

fayz wrote:

kanelli wrote:

sage & onion wrote:

Chocoholic wrote:Also another issue which we've just run into. The lease ran out on the 31st December, so of course all the contracts were resigned and everything before that date, with the 15% increase. I doubt very much that any landlord will go back and redo the contract according to the new rates.

Surely though this would be an issue for the Dubai Municipality Rent Committee.

Didn't the the 15% still apply up to Dec 31st?

If you read the newspaper articles, it seems there is a clause for housing where the majority of the period of rent is 2007, I think Choco has a good chance at getting the increase reduced to 7% should she wish to follow up.

Chocs, check out today's Emirates Today and stick it to the man. Good luck.

As I read it, If your lease was signed in 2006 your rent increase for 2007 should be "zero" (not 7%). The reasons being, I believe, is to level it off to 7.5% over 2 years (as most likely your 2006 rent went up at least 15%). I will certainly fight for "zero" increase - it should be fun (real word "fun" not censorhip).

Important points from the Gulf News article yesterday about the rent cap. http://archive.gulfnews.com/articles/07 ... 93927.html

The new rent cap rule on properties announced on Monday came into effect from January 1.

--------------------
Mohammad Ahmad Al Shaikh, Secretary-General of the Committee, said the rent committee takes action on rent increase issues only if a tenant formally files a complaint with the rent committee.

"We cannot do anything whatsoever if both landlords and tenants agree on the rent increase," he said.

He advised tenants not to hesitate to come to the rent committee if they have any complaint.

The Dubai Rent Committee's office is located on the ground floor of the Dubai Municipality headquarters on Baniyas Road. It's telephone numbers are: 04-2232766 and 04-2215555.

-----------------
So, this means that if the contract was agreed on and signed by both tenant and landlord during 2006 and according to the 15% cap for 2006, the committee will likely not allow a re-negotiation of the price. The only thing that could have been done was to wait to sign the contract until after Jan. 1, then you could ask the landlord to renegotiate or take him/her to the rent committee with the unsigned contract, because it then shows you did not agree to the 15%. You'd be risking that the committee would be holding the contract to the 2006 dates and rent cap, but then they might find in your favour and apply the 2007 rent cap. You could call and ask for advice from the committee office (if they will give it without you forking over 7,000 AED) or a lawyer who has been dealing with rent committee issues for clients (will definitely cost you money).

It certainly looks like you don't have a case if you have negotiated your contract and signed it before 01/01/07.

My tenancy contract is soon to expire (Jan 31). This is really such a great news. woohoo! Since my landlord increased my rent 15% last year - therefore based on the rule - I can have the same rent for this year!!!

As Concord said - Im gonna fight for 0% increase. It will definitely be fun haha Cant imagine myself again in my real estate's office.

And don't forget people, you are not obligated to pay any fees to real estate agents for renewing a rental contract for the same property. Sometimes they try to charge the tenant around 2.5% of the rental amount just to make the same contract as last year with a change in dates and rent figure. If the landlord hired the estate agent for looking after the contract and the property, then the landlord pays, not you. Hold your ground! There is mention of this in the Ask the Law column of Gulf News, but I can't seem to find it now...

hopefully the landlords follow the cap rules . even with this the rents are on a highrer side with the salary staying the same for most of the people. wish there was a law where a raise was made compulsory as the rent hike

Jeevan wrote:hopefully the landlords follow the cap rules . even with this the rents are on a highrer side with the salary staying the same for most of the people. wish there was a law where a raise was made compulsory as the rent hike

That would be something, although my Company has a 6 monthly review and adjusts the allowances accordingly, I am just waiting for the rents to drop and see some of our guys start winging

After having studiously avoided the Dubai Forums for 3 weeks whilst sunning myself in Mauritius - I find this piece of good news awaiting my return.

If the landlord doesn't kick us out, it looks like no rent rise for us (as we were new tenants last year) - woo hoo!

Cheers,
Shafique

yea at last MOHAMMED comming wit some justice & all them Landlords be bunch of hustlas (madd propps) hahaha

DON
ISH