Confusion over rent cap expiry

Dubai: Tenants in Dubai are concerned that this year's rent cap has not yet been announced, despite the current one due to expire as we enter 2009.

Tenants are also worried that the Real Estate Regulatory Agency (Rera) will announce the new cap once rents have already been paid for next year.

"I have not seen any news on a rent cap for 2009. Is there one? Or will landlords be able to increase [rents] as they see fit?" said one tenant.

Another tenant, whose rent was increased by 17 per cent, said he prefers to keep quiet.

"My rent is still below the market price. So it's okay. Besides, the last thing I want is a hassle with the landlord," said a long-time Dubai resident, requesting anonymity.

The rent cap in Dubai currently stands at five per cent, but some landlords have been ignoring this and happily jacking up their rents, angering tenants.

However, rent caps may not be necessary from now on as average rental rates will be decided for specified areas once Rera has finalised its rental index, which will be done when 60 per cent of tenancy contracts have been registered.

But some analysts have said that it is too premature to remove the rent cap as with the lack of mortgage facilities, rents are actually going up, not down.

Determining factor

And other analysts and tenants say it is not possible to impose an average rent for an area, as it is only the market that dictates rents.

Dubai's supply of rental accommodation continues to increase, with around 140,000 housing units set to hit the market by 2011.

There has also been some confusion regarding the recently announced online registration site for tenancy contracts, implemented recently by Rera.

Rera unveiled its Ejari website last week, with the main aim of making it compulsory to register all rental contracts starting today.

While the exact cost of this registration hadn't been finalised when Gulf News broke the news, Marwan Bin Galita, chief executive of Rera, said it would be around Dh100 per contract.

Owners, however, say the reality is far different as a costly training day is also part of the process.

"I contacted Rera about the registration. They told me that I must attend the one-day Ejari training programme, which will cost Dh2,000 per person to get an online user account. Only after that can I register my property," an apartment owner told Gulf News. Rera officials were unavailable for comment on this.

Renting directly to the tenant may prove to be more beneficial as it would remove the necessity of paying an agent.

If the tenant found a property to rent through an agent, then the agent will register the contract online.

If there is no agent involved, then the landlord and tenant must both sign the registration form, said Bin Galita.