Dubai: Illegal subletting in some of Dubai's swankiest areas is on the rise but remains underground.
XPRESS investigated the phenomenon in New Dubai, including Jumeirah Beach Residence (JBR) and Marina, and discovered that people are making a living off the trend, leaving a paperless trail right under the radar of authorities.
The rules regarding subletting in Dubai remain unknown by many and there are few guidelines governing the increasingly common practice that rarely involves written contracts.
Authorities said subletting can only legally occur if the owner approves, but most tenancy contracts include a clause forbidding it.
Three British expats in a Dubai Marina tower were caught unaware in the middle of a subletting ring this year.
The tenants said they thought they were renting the apartment from the owner until the real owner knocked on their door.
Deposits lost
They said it turned out that the real owner had not approved the subletting of the apartment. Instead, it was rented to an American man who had then sublet the rooms, posing as a legitimate businessman.
The tenants lost the deposits that they had paid to the American, but were allowed to continue renting the apartment by paying directly to the owner. They later discovered that the American was also caught illegally subletting a JBR apartment, but so far no one has opened a police file against him. The American apparently makes his living off the practice, the tenants said.
An Indian real estate agent, who refused to be named, said he sublets several apartments in Dubai Marina and JBR along with a lady, whom he calls his assistant. The agent and the lady refused to provide any tenancy contract that may prove that subletting is allowed.
The agent, however, maintained that he had the permission from the owners of these apartments. He said subletting meets the demands of both tenants and owners. He said owners need a better return as property values have plummeted since 2008, while residents cannot commit to a year's lease as there is still no equivalent job security.
The problem, he said, is that tenancy contracts have failed to keep pace with reality. They are based on a standard rule that still includes the clause prohibiting subletting. This template needs to be updated to make this much-needed service legal, he added.
He also predicted that rents may continue to drop further when construction of properties in New Dubai is completed next year.
In the past, authorities have cracked down on illegal flat and villa subletting in several other parts of Dubai — and have maintained that overcrowding may cause health and safety risks.
Authorities have also urged people to complain to the police against those who illegally sublet properties in order to regulate landlord-tenant relationships.
