Some Dubai property owners are facing problems renting out apartments for short-stays

Dubai: Fresh tensions are brewing between landlords and OA (owners association) management companies in Dubai over allowing apartments to be leased out for short-term stays. This comes at a most inconvenient time for the landlords ahead of demand starting to pick up significantly ahead of the Expo’s opening in October.

In recent days, more landlords are receiving cease-and-desist notices issued by the OA companies managing the buildings where they have the units for lease. These were issued even though those units are licensed by DTCM (Dubai Tourism and Commerce Marketing) to be rented out on short-term basis. (DTCM is the sole licensing agency for short-stay or holiday home rentals in Dubai.)

“I have had my unit on Airbnb for some time now – and then received this message from the OA company to stop all such rentals immediately,” said one property owner with a unit at the Downtown. “If I am licensed to place my apartment on Airbnb, why should the OA try and prevent it, and that too after years when they had no problem about short-term leases?”

Not an isolated incident

Other apartment owners with units at Dubai Marina and JLT are caught in similar predicament. There is, however, a catch to this – “I received the notice to stop all such leasing for periods of less than six months,” said one owner. “But when I checked with other landlords in the same building who have Airbnb listings, they said they have not received any such notice from the OA?

“Is this being done selectively?”

Establishing authority

When they contacted the OA companies, they were told the notices were issued as per the JOPD (Jointly Owned Property Declaration) rules. The JOPD is a contractual agreement that the property buyer enters into and establishes the rights that he or she will have within that freehold building or community.

If a property owner is in breach of the JOPD rules, then action can be taken. The owners association of that particular building can make amendments to the JOPD as per the requirements of the time.

According to the owner, “I was not aware of any change to the JOPD until after the notice was issued. The authorities have given me and others the right as property investors to lease our units, whether for short-stay rentals or not. I don’t know whether the OA company can arbitrarily change the regulations to disallow such leasing.”

According to Vinayak Mahtani, CEO of bnbme, a short-stay service provider, “There are those who make an attempt once in a while to stop short-term rental companies from operating, disrupt the operations, or try and charge unreasonable fees. However, these attempts never succeed.

“Dubai Tourism has been extremely helpful and supportive of recent regulations. On the other hand, there have been OAs who have worked together with us and together we have created a win-win scenario in terms of costs and the type of guests they would like the building to have.”

RERA or DTCM?

Affected property owners are talking to their lawyers on what their response should be to the OA move to use the JOPD rules as their reason to stop short-stay leasing. According to a lawyer, this issue could then fall under the purview of RERA (Real Estate Regulatory Agency).

“If OAs are citing a change to the JOPD rules, then it could be a matter for RERA or the Rental Disputes Centre,” the lawyer said. “But changes to JOPD cannot be used selectively or arbitrarily.”

For the impacted landlords, the hope is that some solution can be found early enough. If this drags on, they will be caught in a situation where they will not be able to list their units on Airbnb or short lease it for any period of less than six months.

That would then be a sizeable loss of income when demand for short lets is building up nicely.