Building towards an equitable relationship

As rents continue to rise across developments in Dubai, tenants are feeling the pinch. Many property owners have asked tenants to pay up the higher rents or leave.

While some government-owned agencies have opted out of imposing rental hikes, many landlords, particularly the private ones, are hiking rental values by 25-30 per cent on average. This has clearly left a large proportion of the working population in the emirate clueless about their rights when renting a property.

Many tenants are hesitant to present their situation to settlement centres as they are not aware of the effectiveness and extent of authority these organisations have on property owners. Although rent increase limits have been in force in recent years, other regulatory measures have been formulated as well to provide protection to tenants.

The Rental Dispute Settlement Centre has been created as the judicial arm of the Dubai Land Department to resolve most of disputes within an optimum period of 30 days. The decree has been issued and the centre will be operational from December. The centre will have 10 committees, out of which eight will be committee for first instances and two for appeal.

New unified rent contract

In another move, a new unified rent contract would be enforced in late 2014 to control increases in rents. Significant changes are also proposed to the rent index so that the results will be more accurate and offer a real indicator of the market. This index will be mandatory to all.

These initiatives are commendable; however, more needs to be done in order to create awareness and ensure enforcement. As pointed out earlier, most tenants are unaware of their rights and broader regulations governing the rental market. Thus, there needs to be more visibility of the respective regulations and simple ways to increase awareness.

The regulatory agencies can dedicate a section of their website to address issues governing tenant and owner relationship, duties and responsibilities and redress process in case of a dispute. Most of the developed markets have such provisions on the websites of regulatory agencies, which makes the process of finding information fast and simple. A section including case studies of previous decisions would also help to enhance trust in the process.

Another best practice would be to make a factsheet available at the time of registering a lease agreement, so that both the parties are aware of their duties and rights at the start of the contractual relationship.

Enforcement is another critical component of regulation. To order to ensure compliance, committee orders must be legally binding and enforceable. Wilful contravention or failure to comply with an order of the settlement centres should be reviewed by judicial authorities.

A Tribunal order for the payment of money (for example, compensation) can be enforced through the local courts. Ask the Tribunal for a certified copy of the order, and present this to the local court, where it will be registered as a judgment debt.

Advisory services

Advisory services play a key role in ensuring people are aware of their rights and can obtain the skills and support to enforce those rights when problems arise. The quality and consistency of that advice is vital.

The right approach will depend on the nature of the dispute. Following best practices when getting into a contractual agreement can also help parties avoid issues later.

Tenants should be aware of the express and implied terms regarding deposit, contract renewal and maintenance services. This could include the amount of rent payable, how often and when it should be paid and how often and when it can be increased. It would be best, however, to have a standard tenancy agreement which the landlords are obligated to use, issued by a regulatory agency.

This would ensure broader contractual terms are in compliance with market regulations.

Access to justice is crucial to maintaining positive long-term relationships between landlords, tenants and the wider community. It is important to bear in mind that there cannot be a one size fits all approach to resolving housing disputes.

However, using best practices can go a long way in preventing issues and fostering a better long-term relationship between tenants, property owners and regulatory agencies.

— The writer is the head of valuations and research at Chesterton International.