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The tenancy renewal fee and its associated costs

Dubai residents are quite familiar with the routine 90-day notice period and the difficulty of choosing between renting a new property or renewing their tenancy contract. Read further to know more:

Renewing the tenancy agreement

A 90-day notice is required from either the landlord or the tenant if either wants to increase the rent or move. A landlord may increase the rent of their property after one year, but any increase must meet the parameters set by RERA’s Rental Index.

For determining whether the renewal amount is in line with the market average, you can always use the RERA Rent Calculator. It is legal to contest a property price that is considerably higher than the average for your type of unit in the area.

If both parties agree on the rental amount and payment structure, the tenancy contract can be renewed for another year.

Read on for some possible costs you should keep in mind before renewing your current lease.

Renewal Costs Of Types Of Property

Various types of properties are available in Dubai, from affordable apartments to high-end villas. Dubai’s Real Estate Regulatory Agency (RERA), part of the Dubai Land Department, ensures that all property transactions are fair and that tenants don’t have to pay exorbitant amounts of money to renew a tenancy contract. RERA’s rental property laws are outlined below.

Let’s take a look at all the renewal fees and related costs that may be involved.

Rent Payment

The tenants must pay the rent according to the agreement with the landlord. A post-dated check for the annual rent must be submitted by the tenant unless otherwise agreed. The number of checks should be agreed upon by the landlord and tenant. It must be mutually agreed upon if the annual rental amount is changed. The change should also be accurately reflected in the tenancy contract.

Ejari Renewal Fees

Ejari registration and renewal are also required. A fine of up to AED 50,000 can be imposed by RERA if you do not comply otherwise. Renewal of your Ejari registration is AED 155 through the REST application or AED 219.75 through the Real Estate Services Trustees Centres. Learn more about Ejari registration here.

Service Charges

If you are the property owner yourself and have not cleared all of the service charges, you will not be able to renew your Ejari. Due to this, the property cannot be granted access to water and electricity. The law was recently introduced to clear up the growing amount of unpaid service charges. The following information should help you better understand Dubai service charges.

Housing Fees

Housing fees, which are 5% of the annual rent and paid to the Dubai municipal authority, are another cost of property renewal. The fee is paid in 12 monthly installments and is added to the tenant’s Dubai Electricity and Water Authority (DEWA) bill.

Maintenance Fees

Landlords must also consider the annual maintenance fees charged by developers such as Emaar, Nakheel, and Dubai Properties. In some cases, these fees are transferred to the tenant, so if you’re renewing your tenancy contract, be on the lookout for these costs.

In addition to these costs, if the landlord and tenant have used a property agent or agency for the drafting and renewal of the tenancy contract, an admin fee may be due. Brokers and agents cannot charge brokerage fees, maintenance fees, or any additional fees.

Source: https://www.propertynews.ae/guide/the-tenancy-renewal-fee-and-its-associated-costs/

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