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New changes in Dubai tenancy law

Published on October 5, 2016 by Dubai Apartment

The Dubai Land Department enacts amendments into the regulations of purchase and rent of estate in order to prevent fraud. Now all agents involved in this kind of operations will have to check authenticity of estate owners, and make sure that the person who is trying to sell or put up property for rent actually owns it. The Dubai tenancy law also permits offering property for rent not only by its owner, but also by tenants who signed a long-term rental agreement.
Verifying legitimacy of ownership of the property that is being put up for rent or sale requires documents, confirming that the individual truly owns the estate or has signed a long-term rental agreement. The verification is carried out via the Smart Broker app, which was developed and released by the department, and registering in it is necessary for brokers as well. Brokers who will not follow these Dubai tenancy laws will be fined and even sued in the most severe cases.

Aren’t these legal changes going to affect rental rates and complicate the procedure of estate rent?

Dubai tenancy law

What’s the point of tightening the Dubai tenancy law?

First of all, these changes were initiated in order to fight fraud and deception of tenants and purchasers. There have been many hoaxes in Dubai when people who only have temporary access to estate put it up for rent or for sale. Sometimes even some dishonest tenants try to carry out this scheme. And even though the percentage of such cases is not very big, considering the immense number of transactions on the Dubai estate market, the number of such fraudulent cases is still sufficient.

Dubai tenancy lawAs a result, many tenants and purchasers might find themselves in a situation when they pay their share according to the agreement, but subsequently find out that they weren’t dealing with the actual homeowner, therefore they have no legitimate rights to reside in this apartment. 

In such cases the frauds take advantage of the weakest spot in this scheme: brokers can’t pay proper attention to ownership verification because of the huge number of deals, and tenants and purchasers tend to rely on the agency’s trustworthiness, hoping that brokers would check every estate object thoroughly. The renewed Dubai tenancy law wholly places the responsibility for situations of this kind on brokers.
Is it going to affect prices?
There’s no basis for increase of the rental rates or purchasing prices. Yes, the changes will make brokers a bit busier, but not above the amount of work that agencies are supposed to perform as it’s prescribed by the law. Besides that, agencies will not be able to increase fees for their services, as it may render them uncompetitive.
Also, thanks to the new requirements, the array of fraudsters who didn’t have much impact on price formation whatsoever will be wiped out from the market. There’s no point expecting the increase or decrease of purchasing prices and rental rates due to these changes.

The Dubai Land Department enacted some amendments into the Dubai tenancy law for better purchasers’ and tenants’ protection

The situation from the perspective of a tenant or a landlord

Similarly, the renewed Dubai tenancy law won’t affect the simplicity of the renting process itself. When a potential tenant or purchaser finds a suitable apartment in the agency, he or she can rest assured that it will be purchased (rented) exactly from the homeowner, and not from a landlord’s quirky neighbour or a tenant. The process of rent or purchasing remains unaffected.

To sum this up, Dubai has made another step towards making its estate market even more transparent and safe, without complicating it for homeowners, purchasers and tenants. Therefore, there’s one more reason to buy estate in Dubai.

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