Tips for a Landlord Renting Property in Dubai’s Competitive Market

Be Prepared to Rent Your Property

When leasing out your investment property to a tenant in Dubai, it's essential to remember that while the property is yours, it will become their home for the duration of their stay. Presenting the property in its best condition is crucial for attracting quality tenants and securing a favorable lease agreement. Ensure the property is freshly painted and thoroughly cleaned before listing it for rent. Additionally, have your listing agent address any potential maintenance issues beforehand to streamline the leasing process. Remember, just as landlords seek good tenants, tenants also seek a reliable and accommodating landlord.

List Your Property Correctly

Any investment left unattended results in lost revenue, making it imperative to mitigate losses by ensuring your property is correctly listed and priced. Every day a property remains vacant equates to lost income. Additionally, in Dubai, property owners are responsible for maintenance service charges, meaning empty properties not only miss out on rental income but also incur ongoing expenses. In a competitive market, it's financially prudent to avoid overpricing a property and leaving it untenanted, as this approach contradicts sound investment logic.

Create a Condition Report

As a landlord, your property should be handed back in its original condition at the end of a tenancy contract. Tenants have no right to alter or renovate the property unless the owner agrees. For your own protection, a condition report should be made by your agent to prove how the property looked before moving in so you have a reference when the tenant moves out. 

Keep the Law in Mind

Landlords should always be aware of their rights, as outlined in Law No (33) of 2008 in Dubai. According to this law, landlords have the authority to evict tenants before the contract expires if specific offenses are committed. These offenses include failing to pay rent within 30 days after receiving notice, subletting the property without written approval, using the property for illegal purposes, and causing damage that renders it unsafe for occupants. It's essential for landlords to understand and assert their rights within the bounds of the law to maintain a fair and harmonious landlord-tenant relationship.

Contracts and Periods

In Dubai, all tenancy contracts operate on a yearly renewal basis. If you intend to increase the rental rate, it's essential to have your agent verify the yearly rental review with the Dubai rental committee first. If the review is in your favour, you must issue a notice 90 days before the contract's expiration.

Similarly, if you wish to amend any other conditions in the contract, the same process applies. Both parties must agree in writing, and the changes must be notarised by the Dubai court. Additionally, tenancy contracts typically include a break lease clause, advising a 30-day notice period with a two-month rental penalty to the tenant. Understanding and adhering to these contractual obligations ensures a smooth and legally compliant rental process for both landlords and tenants in Dubai.

Payments and charges

Receiving payments for rental accommodation in Dubai may be very different to what you’re used to in your country of origin. At the beginning, you will be given a security deposit from a tenant to secure the property, this is typically 5% of the annual rent or 10% if the property is furnished. This is only payable to you when a tenancy contract is signed, or if a tenant backs out of a deal once a reservation form has been signed by them. Instead of paying monthly for the rent, payments are typically given in one, two, three or four cheques spread throughout the year. For example, these are often provided to yourself at the beginning of the contract, with one of the cheques being current and three being post dated. The reason we advise landlords to take cheques is they act as a form of security if the tenant breaks the contract. In order to protect a tenant, the broker should supply a copy of the cheques. This way the tenant has physical proof of rental payments should a dispute arise.

Payments for services such as DEWA and Air conditioning are made in the name of the tenants, and a paid full and final bill should be issued to your agent at the vacating of the tenants. This is used when the new tenants move in to your property and a new account, in their name, is opened. As a landlord you will also need to be registered with the service providers and a security deposit is payable from yourself. This amount is held in your name and used should a tenant abscond or leave the property without paying any outstanding amounts. This deposit is returnable to yourself from the service provider should you sell or dispose of your property to another owner. In all case the maintenance fees for the property also has to be up to date and a paid account supplied before a tenant should move in. This is because access to car parks and beaches along with pools and gyms are subject to the use of active access cards. These will not be activated if maintenance fees remain outstanding. 

On a tenant vacating, all possible outstanding maintenance issues and service bills from the said tenant are to be paid in full, and a cleared paid account must be supplied. Should any balances still remain outstanding after the tenant vacates, you will still hold the security deposit which was given to you at the time of reserving the property, or on the signing of a tenancy contract. In this case the deposit can be used to clear off any outstanding matters.

In navigating the intricacies of Dubai's real estate landscape, Engel & Völkers stands ready to provide expert guidance and assistance, ensuring both landlords and tenants navigate their contractual obligations seamlessly and with confidence. Contact us today!