Agency fees
According to the Real Estate Regulatory Agency (Rera) ethical guidelines, a property broker should only charge commission to the party they are representing, However, there are loopholes. “Depending whether the property is managed or not, the landlord will also be charged for this service but normally the commission is payable by the tenant only,” said Volpi.
The typical agency commission is five per cent of the yearly rent, but there is no law that specifies a minimum or maximum amount of allowed fees, explained Ludmila Yamalova of HPL Yamalova & Plewka JLT legal consultancy.
If you renew your lease through an agency or management company they may charge an administration fee, although not all of them do so. Your lease should stipulate the charge.
“Some charge approximately one per cent of the annual rent, or a flat rate of between Dh500 and Dh1000. In any case, the renewal fee should be agreed by all parties beforehand,” says Volpi.
Ejari fees
“If the property is managed then the agent can register it at Ejari on behalf of the landlord. The responsibility for Ejari registration lies with the landlord, but the tenant can now also register the tenancy themselves. The cost is AED 195 in person or AED 160 online,” says Volpi.
Firozi warned that the Ejari fee also has to be paid on renewal, usually by the tenant and it should not be more than Dh200.
Deposit
The deposit is usually paid with a post-dated cheque. The contract should have a clause saying in what time frame after vacating the property it should be returned to you. “The deposit is usually five percent of the annual rent and should be held by the landlord,” according to Volpi.
But, Firozi added that in some cases landlords may demand a deposit equivalent to one month’s rent. “For furnished units the deposit is higher and would depend on the type of furniture and appliances,” he said.
There are often arguments over whether the property was handed back in the same condition. This is why a checklist and, even better, photographs of the property are necessary. Also try and include a definition of normal wear and tear and responsibilities for maintenance. “The tenant must ensure that the property is returned to the landlord in the same condition that it was rented. The landlord reserves the right to make deductions from the deposit in case of any damages to the property caused by the tenant,” Firozi explained.
Water, electricity and district cooling
The Dubai Electricty and Water Authority requires a refundable deposit of Dh1,000 for an apartment and Dh2,000 for a villa. Check that the unit is registered in the current landlord’s name before you get the utilities connected.
You could ask the agent to connect the utilities for you. “Some agents may do it for free, but tenants should expect to pay a nominal fee if they wish the agency to connet the utilities,” Firozi said.
Cluttons, for example, will connect DEWA and district cooling (A/C) service for approximately Dh250, according to Volpi.
District cooling deposits and connection fees vary according to the provider, but you can check their web-sites for up-to-date charges.
Unexpected charges
Some landlords charge if your rent cheque bounces. “Most tenancy agreements will stipulate some penalty charges if the tenants rental cheques gets returned by the bank for any reason. This could range anywhere from Dh250 to Dh1000. Tenants must refer to their tenancy agreement to know if they would be charged and what the charges would be,” says Firozi. Be aware it may not only apply when you have insufficient funds but also if your cheque is returned because your signature was what banks call ‘irregular’. Some contracts even state that if it happens more than once the landlord can evict you.
There shouldn’t be anything else to contend with, but Firozi recommends that tenants always read the terms and conditions of the tenancy agreement as there may be other fees and charges for which the tenant may be liable.
