Toby Young, Founder and Managing Director of Propertyrights.aeToby Young, Founder and Managing Director of Propertyrights.ae, gives SME Advisor the inside scoop on how to avoid getting scammed when it comes to renting.

The property market in the UAE, specifically Dubai, is like no other. No matter where in the world you are from, you’re likely to find it very different from what you’re used to. Although this can be seen from both the sales and rental perspective, for now we will concentrate solely on the rental side of the Dubai property market. In theory, renting a property should be easy. But due to various differences in the market, prospective Dubai tenants often wonder if they are being scammed, or if the person they’re dealing with is acting in the tenant’s interests or their own. In a lot of countries the landlord will pay the agent a fee or a percentage from the rental income. Meanwhile, any property rented will either be maintained by the real estate agency or by a landlord who is on hand to deal with any issues that may arise while rent is paid on a monthly basis. This is different in Dubai, and prospective tenants should not feel aggrieved by it. In general, the tenant will pay a pre-agreed amount, usually five per cent, to the real estate agent. Also, in the past the agent would have had very little communication once the rent has been paid. Over the last few years, this has changed somewhat.

Many landlords now leave the management of the rental property to the real estate agent. The one thing that catches many people out is how the rent is paid. In the past tenants may be used to standing orders or direct debits; these are relatively new to the banking system in the UAE. As such, it is not uncommon to be asked to pay a year’s rent upfront, or in a number of cheques. More often than not, the number of cheques used is also used as a bargaining chip to reduce the total amount of rent paid. In Dubai, when it comes to renting a property everything is negotiable – from the price to the number of cheques. Many people ask why they have to pay such a large amount up front, but there is no hard and fast reason. The main cause seems to be the transient nature of Dubai’s population. It means that a landlord needs a certain guarantee that the full rent will be paid for the entire tenancy. At this juncture it is worth remembering that cheques in the UAE – as long as they are signed and no more than six months old – are deemed as good as cash. Should a cheque bounce and not be honoured then criminal proceedings can take place. The system – alien to many – can lead to confusion, misunderstandings and invariably mistrust. After all, how many people have a year’s rent sitting around in a bank account? As with any industry, where there is money to be made, there are also people pushing the margins of what is legal.

Thankfully, all real estate transactions in Dubai are governed by the Real Estate Regulatory Authority (RERA), a branch of the Dubai Land Department (DLD). RERA is a governmental body that puts all the laws in place surrounding rent increases, evictions and how real estate transactions must take place. This means that every real estate agency and every real estate broker must be licensed by RERA. If not then it’s not legal for them to act in such a capacity. Getting licensed isn’t easy. It requires applicants to sit exams and sponsor companies have to leave large deposits. If either the broker or agency acts illegally then RERA is entitled to penalise them. And individual parties can log complaints against agents too. This is dealt with the by the Rental Disputes Settlement Centre (RDSC). They hear each case based on its merits and offer a verdict accordingly. They are known to be very fair and do not favour one nationality over another. At the end of the day, the law is the law, and the judges ensure it is upheld. For those feeling confused or worried about getting scammed, here is a short checklist to help guide you through the process.

Rushika Bhatia Editor

Rushika Bhatia is one of the region’s leading commentators on business and current affairs issues. She is the Editor of SME Advisor magazine - the flagship title of CPI Business. She is passionate about infographics – with special emphasis on data, research and statistics. Rushika has a Bachelor’s Degree from Indiana University, USA and is also CIMA qualified.

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