11 October, 2007

Is there a Rent Cap?

On the first day of 2007, H.H. Sheikh Mohammed bin Rashid Al Maktoum issued a decree which gave some "hope" tenants paying exorbitant rents in Dubai.

"According to the new decree, rent allowance shall not exceed 7% of the annual rent charge of the property. This shall apply to all rent contracts that are to be renewed in 2007 on condition that no rent increment was made on that property in 2006. No rent allowance increment shall be made in 2007 on properties whose contract had already been signed in 2006, Article 2 of the new decree said."

Despite my landlord raising my rent in 2006 with the 7% rent cap supposedly in effect - this year my landlord has increased the rent this year by more than 12% to renew the contract for the flat I have been staying for more than 5 years.

When I raised this issue with the owner, he laughed and said "nothing is going to change - pay the rent or get out!."

I just wanted to know if I missed reading a "by-law" some where along the course of the year which nullifies Sheikh Mohammed's decree or should I just swallow the fact some decrees have no weight and pay another rent increase which would be funding his family skiing trip in all probability.

Can anyone on UAE Community please clarify the rules? Thank You!

This rent increase notice has really made my Eid fun!

Link: New Rent Cap Ruling - 1 Jan, 2007

18 comments:

i*maginate said...

...and you know what has made my Eid more miserable? Knowing I could have been your landlord, raising your rent by 100pc knowing you would probably leave because of your inexcusable ignorance.

And before the other ignoramuses come on board in the comments section with similar complaints, anyone who rents in Dubai should *know about the rental law*.

You should by now know that a *Rent Committee* exists.

If you didn't know that, I do sincerely hope your landlord enjoys a not only a fantastic skiing holiday, but an around-the-world trip on first class, their extended family included.

If you are genuinely gullible, then here is my advice: your landlord did not "illegally" raise the rent in 2006 because to my knowledge, it was not "illegal" in 2006 to raise the rent - it was only illegal at that time to increase the rent by *more than 30 pc over a 2 year period.* However much it was, and if it was indeed against the latter law, you already signed the contract, and neither did you dispute it by filing a case, from the info you have provided. :) And the 7pc cap, according to the law you've quoted, only applies to contracts to be renewed in 2007.

Now, if you are foolish enough to accept his next rent increase (because you already had your rent raised in 2006), and you *sign the 2007 contract*, you have accepted his terms, and there is no way you can legally contest this afterwards.

As per the law, your landlord is obliged not to increase the rent, but as I said, if you accept it, nothing you can do about it after. But if you want to contest this, file a case with the Rent Committee (you need to pay something like 2.5% of your rent as fees) and when you most likely win the case, your landlord will have to reimburse the fees by way of taking it off your rent payment, which will be judged by the Committee (and the landlord will be asked to give you a contract with the agreed rent).

The Rent Committe has a telephone number but they rarely pick up because they are inundated with enquiries from individuals a little more Dubai-savvy than you. Look their address up on the internet - they are part of the Dubai Municipality, based next to InterContinental Hotel DXB.

Keefieboy said...

If the Rent Committee was remotely effective, they should have enforced the caps announced over the last few years. Read this - and the comments. I believe the fee is 3.5% of the annual rent, and if you lose the case, you lose the fee. Say the rent in dispute is dhs 60,000, 3.5% is dhs 2,100 - that's a lot of money to risk on an outfit that seems not to agree with the rent caps.

Freemind said...

Thanks i*maginate for your advice. Nope - haven't signed the contract yet.

You just read my mind keefieboy- I was just going to add the link to moryarti's post.

Guess it is worth a shot in the rent committee - but the mesenger who delivered the notice to my house stated the landlord wants them to issue notices saying he wants the house for personal use and then rent them out to others.

The current rent is 60k and new rates for tentants are 145k. Talk about being greedy!

Anonymous said...

Freemind

Well that's how free market works. Sadly.

Never heard of rent increase in Cuba.

i*maginate said...

This is what moryarti writes:

"My friend's sensation of victory lasted for 30 seconds only when the landlord rep told him that, in spite of the decisive evidence, the rent committee can't do anything about it."

OK - another defeatist, ignorant case.

Who should listen to a "landlord's rep" when there is a legal body that states the law? moryarti doesn't make it clear what the RC actually said - instead, his gullible friend just listens to his landlord - which is what a heck of a lot of people do here: not consult the Rent Committee when their landlord is breaking the law!

I can guarantee you that under no circumstance does the Dubai government allow a tenant to be evicted (unless building being demolished etc) and if so, it is allowed under VERY rare circumstances, also taking into consideration the isolated case (if you don't believe me, please go and ask the Rent Committee).

keefieboy, I believe the fee varies according to the rental amount. And I agree, the cost is a lot to fork up all at once for those who can't afford it, e.g. if the fee is 2100, and you have 2 rent instalments, you have to wait for the 1050 to be reimbursed at the next instalment, which can be unaffordable for some. I don't agree with this fee structure and believe if any fee, it should be reimbursed immediately by the landlord if the case is won by the tenant.

"If the Rent Committee was remotely effective, they should have enforced the caps announced over the last few years."

"enforced"?? Nope. Tenants should go report a case.

I have an alternative, keefieboy, to those who cannot "afford" the fee, of which there are many:

If, as a tenant, you know you are right by law, and that the landlord should provide you with a renewed contract with X value of rent, then insist on it and let THEM file a case against you. Simple.

Now, freemind, in addition to the points above, it is HIGHLY important with a case like this, in which you are receiving a written notice, you must from now on communicate with the landlord reminding him of the law etc. BUT you must put everything in WRITING. NO telephone calls or text messages. The reason for this is that if your case goes to court, only written evidence will be accepted, and nothing else.

You must also, in your correspondence, show that you are willing to pay your rent (as per the legal cap) and that they should send you a contract.

Lastly, keep any fax reports and if you courier anything, ask for the delivery report.

From what you're saying, don't be harrassed by your landlord, and don't give in, because it is quite a simple case really and there is nothing to dispute: but you must start written correspondence with him to avoid looking as if you are not "cooperating".

Anonymous said...

anecdotal evidence suggests that the rent committee is now a lot more favourable to tenants rather than landlords. sometimes irrationally so, i hear. so give the committee a try...

plz help me said...

i*maginate i wish i had spare time like u do. will u fight for me u have so much time like more than 24 hrs in just a day. bcuz we poor ppl are always gullible and foolish and have families and job to do so plz fight for me if u cant do that plz pick up telefoon at rental cometee we need somoene to pick it plz understand u. plz. u can also put it on cll frwrd to help ppl.

Freemind said...

i*maginate

Thanks for the help and advice. Much appreciated for taking out time and replying promptly.

Just ignore the other ungrateful responses.

Have a good Eid!

katib said...

Hey i*maginate - on a lighter note - by the look of it "plz help me "
sounds like one of your tenants who found you online and is venting his frustration at you!

Lol - why aren't you picking up your phone at the rent committee office?

Emirati said...

great job in informing free mind, i*maginate. could I have your permission to post this information in my blog ?

osh_kosh_beegosh said...

shez buzy answering fonz at the rent office go ahead u have my permisin

i*maginate said...

*anon 11/10 19:50, the Rent Committee, as far as I know, has always been fair in its dealings in the past as well. Your opinion has probably been shaped by the recent wider local media coverage of RC cases, and the RC's encouragement of tenants to bring forward cases against landlords that do not comply with the rental law.

*plz help me: plz call a psychiatrist.

*freemind, enjoy your Eid too - thank you.

I apologise for the slight agression in the first response - it was not necessarily directed at you personally, rather to those who are not aware of the law, and as a consequence, feel they have to vacate their homes when there is no obligation to do so. I feel frustrated when I hear of so many cases from people with the same qualms as you, who face threats to vacate, and often do leave, because they don't know their rights and how to protect them. That's why I gave all the information I know, in the hope that at least one person will benefit from not having to unnecessarily opt for turning their life upside down by vacating, then facing the near impossible task of finding another home with the same rent.

If a landlord is branded as "greedy", it's only because the tenant agreed for them to be so :P

For professional advice, visit the RC personally - their office hours are something like 8am-2pm.

Good luck, I am sure you will do well. Remember, the law is on your side, but keep things in writing ;)

*katib, what makes you so sure he is a he and hot a she?!

As for the Rent Committee not picking up calls, perhaps you should call them to ask for the reason ;)

*emirati, thank you :) By all means, feel free to do so. Edit the text as you see fit. Correction, though: RC is not by the "InterContinental Hotel" - it's called "Radisson" now. In any case it's in the Dubai Municipality premises by Dubai Creek.

*osh_kosh_beegosh: Since you like osh_kosh, you may enjoy toys r us too: try the toys for kids aged 0-3

freemind said...

i*maginate - can I put up ur response on my blog too.

Will do the needful correction of the hotel name.

Thanks once again.

monk_who_sold_corrola said...

im selling my ferrari i*maginate plz work overtime as the fone operator and then we can settle a good deal

Anonymous said...

Is there a rent committee in Abudhabi?

Anonymous said...

things are even more fun in sharjah. during 3 years, the rent is fixed and can't be increased. Then the landlord may increase to "market rates" and it will be fixed for another 2 years.

Now, my 3 years are over and every year i fought with my landlord and went to the rent committee. they fixed it. But now i had to accept an almost 80% increase because that is the new "market rate".

Not to mention, the tactics of the -tactics of the landlord's rep : indirect threats, direct threats, only dealing with tenants after 11 p.m in the dark parking lot in his car...and i am not a scared guy with family that is easily threatened.

Anonymous said...

imma bust a rent cap up yo ass

i*maginate said...

*Anon 14/10 11.43

Not sure about the updates on the AD rental law: check Gulf News archives section, there are some articles there.

*freemind, most welcome to do so. Ahem, can we have your bloglink, please? Would be nice :) And please keep us updated with your case!

*anon 15/10 11.36 Your annual increase equates to approx 27% year on year!

Ever thought of moving to Dubai?

Example: In Shj you have been paying 60k rent for the last 3 years, then it goes to 108k pa for the next 3 yrs. In the 4th year, your total rent amounts to 288k as per your 80pc increase on 60k. 108k pa for the next 2 years as per Shj law.

In Dxb you would have been paying 60k in the 1st year, and over 2 yrs a max of 30pc increase as per the legal cap, meaning on the 3rd contract renewal, you would be paying ca. Dhs. 207k over 3 yrs in total vs. the Shj equivalent of Dhs. 180k. As your rent would have been increased in 2006 in Dxb, according to the current law, your rent would stay the same for 2007, meaning over 4 yrs you have paid a total of 285k.

So, same timeframe Shj vs Dxb, 4 yrs in Shj you are paying 288k vs. 285k in Dxb.

In Dubai, it is likely, if any announced cap for 2008 contracts, it will not exceed the 7pc cap of last year on 2007 contracts.

Do the maths on renting in Dubai vs. Sharjah and saving on fuel/time, and you might find an alternative to dodgy midnight parking lots.

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