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Landlord fees must be justified

Administrative fees can be charged by property companies, Rera says

  • By Mariam M. Al SerkalSenior Reporter
  • Published: 00:00 January 19, 2013
  • Gulf News

  • Image Credit: Asghar Khan/GN Archive
  • Existing laws state that Dh110 covers the Rera administrative fees and Dh50 covers the Ejari registration fees for tenants.

Dubai: The Real Estate Regulatory Authority (Rera) in Dubai has clarified that tenants can be charged over and above the mandatory Dh160 in government fees to renew their tenancy contracts.

Existing laws state that Dh110 covers the Rera administrative fees and Dh50 covers the Ejari registration fees for tenants.

However, in an interview Marwan Bin Galita, chief executive officer of Rera, told Gulf News that property companies can also charge their own administrative fees as long as they are transparent and can be justified to the tenant.

Tenants must also be vigilant regarding some real estate companies, he said, that may attempt to charge more than what would be routinely accepted as justifiable expenses to cover administration.

“Administrative fees cannot be stopped and they can charge the tenants to cover the various costs, such as updating the contract. But they have to be justified. It is important for tenants to communicate with the real estate agents and landlords, and they should ask what additional charges they are paying for,” said Bin Galita.

“The purpose of Ejari is to create transparency between landlords and tenants, so it is in the right of consumers to ask what the extra charges are for,” he stressed.

Bin Galita’s comments were made after several residents questioned whether they were obliged to pay additional administrative charges or not, as requested by the real estate company that manages their apartments.

“I have been a tenant of Wasl [properties] for the last few years and was not charged any extra costs until now. But when I wanted to renew my tenancy contract, I was charged an extra amount of Dh100 besides the Ejari fees. I do not know if I am legally bound to pay this,” said P.M., a resident.

When contacted by Gulf News, a representative of Wasl properties explained that the semi-private company does indeed charge the additional Dh100 as an administrative fee and that according to management, they charge an Ejari fee of Dh190.

Another resident, who lives in a newly developed area of Dubai, said that he refused to pay any additional administrative charges to his landlord as part of renewing his tenancy contract.

“I was initially informed to pay more than the required Dh160 Ejari fee and I blatantly told the landlord that I was not going to pay more than what is required. He did not argue back and I did not have to pay extra,” said the resident, who declined to be named.

Comments (8)

  1. Added 17:28 January 19, 2013

    Rera has fixed the maximum Ejari contract fess liable on the tenant, any management company/Landlord can charge maximum Dh200 for Ejari Registration. (Ejari License Dh50 + Rent Registration Fee Dh100 + Knowledge Fee Dh10 + Management Service Charge Fee Dh40). Apart from that if any landlord is charging any other amount than of course they should justify the charges.

    A Seddiqi, Dubai, United Arab Emirates

  2. Added 13:15 January 19, 2013

    One company is charging Dh500 for renewal as administration charges for past three years. We have to pay ijari and it's adminiatration fee separate. and I know this ijari is of no use. Can any one explain how it is protecting Tenant? Where are the right of tenants mentioned? Only landlords have some rights?

    Faraz, Dubai, Pakistan

  3. Added 11:38 January 19, 2013

    I paid 5% commission which was Dh1,800 to real estate and after 6 months bldg owner sold bldg to new owner. when time comes for renewal new real estate charge me Dh1,000 comm again. For 4 years most of the tanents have raised this issue, but no action has been taken. now we have new bldg owner and he is not charging anything, but i have lost 4k which i believe wont come back to me. Also, i dont understand admistrative fee and services charges fee in all the deparments. departments web sites never mention these fees in their list. I change my visa I paid Dh5,000 as a deposit aginst my family, i paid Dh150 extra as admin fee and service charges. i also paid Dh10 to bank to deposit my money when i got new visa. i wanted to return my money from bank then again i paid Dh10 to bank to get my money. I still dont understand why all this fees are not mentioned in websites and forms.

    kashif, sharjah, United Arab Emirates

  4. Added 11:08 January 19, 2013

    I really don't know why all of sudden this extra charges started, what is the rent for? and also they are increasing 10% on the rent still we have to pay the admin charges for what?.i have been leaving in this country for so many years. what we earn we pay in house rent here. at some point i will agree but Rera should have a fixed amount if you give a chance to real estate open system they will surely rip you off try to make money with all nonsense explanation. Please think about us. its not at all fare.. can government increase our salaries???...

    Terence, Dubai, United Arab Emirates

  5. Added 10:25 January 19, 2013

    On sports city lanlord is asking for Dh1,000 fees as administrative and maintinance cost. I think it should be paid by landlord not tenant. Can someone answer please?

    RAG, DUBAI, United Arab Emirates

  6. Added 09:53 January 19, 2013

    If there is no cap on this administrative fee they could charge any amount. My question is, what is the rent for? Doesn't the lease cost cover all these? As a tenant I can justify many reason for not paying it.

    JA, Dubai, United Arab Emirates

  7. Added 09:47 January 19, 2013

    This subject always came to my mind and i think Rera should enforce a fixed amount for real estate services rather than the open system allowing many rip off cases. for example, the common system running is that they charge 5% of the contract value as commission, the question is why? If 2 tenants, one is renting a studio in al qusais he went and found it himself looking around for say Dh27000, and another is renting a 5 bedroom villa in palm island he also found roaming around or read an ad in the paper, for Dh260,000 per year, the real estate will charge the first one 5% of 30,000, that is Dh1,500 and charge the 2nd Dh13,000 for providing exactly the same service, which is filling the form and getting it signed. This is unfair. In my opinion the commission or administration fees should be unified and fixed. Say Dh200 per contract, if the tenant went and signed a contract with a real estate to search for him a specific requirement and show him around the suitable short list then it is different and they deserve a service fee. Similarely if the landlord signed with them a contract to manage his property and maintain it on his behalf then they deserve a fee from the landlord. In my opinion the commission being a percentage is unfair and not justified and it should only be in the first year only after which the landlord can sign the contract renew directly with the tenant. If the landlord is not available to sign a contract renewal then he should pay the real estate office to act on his behalf and pay the administration fees.

    azh, dxb, Jordan

  8. Added 09:44 January 19, 2013

    I don’t know, also last week I renewed my contract for discovery garden 1BHK Apt. and they charged me Dh700.

    Satish, DUbai, United Arab Emirates

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