Are you considering a career in the Dubai rental market?
The booming leasing market in Dubai offers an excellent opportunity for new real estate agents to kick off an exciting career. But, before you take that first step, you should know a few fundamentals of the law and the essential terminology.
In “Introduction To Dubai Leasing Process (New Agents)”, our brand new session at Bayut Academy, we share all the essentials you need to launch your career in Dubai rentals.
Who Is A Real Estate Broker?
A real estate broker is defined as an individual acting as an intermediary between developers and buyers in the primary market and real estate sellers and buyers in the secondary market.
Offering good service and having in-depth market knowledge sets a good real estate agent apart from the rest.
The Dubai Leasing Process
Before we delve into understanding your duties as a real estate agent, let’s look at the typical leasing process for clients:
- Searching for properties
- Short-listing properties on Bayut for viewing
- Viewing properties
- Submitting an offer
- Submitting security deposit and rental payment (either cheques or one-time fee)
- Signing tenancy agreement
- Registering Ejari
- Connecting DEWA
- Arranging for a moving permit*
But what is your role in this process?
A common misconception is that a real estate agent’s duty is restricted to showing properties to clients. But it is much more–which can lead to your success as a leasing agent in Dubai.
Here is some rental terminology you should be familiar with:
| RERA (Real Estate Regulatory Authority) | A government agency with full legal authority to regulate the real estate sector in Dubai. Launched in the year 2008. |
| RDSC (Rental Dispute Settlement Center) | A government committee which oversees rent disputes between landlords and tenants. |
| Ejari | A registration system in Dubai by the Land Department for tenancy agreements. |
| DEWA (Dubai electricity and water department) | The sole electricity and water supplier in Dubai |
| Rent Cap | The maximum percentage increase in rents in a given time period. |
| Rental Index | Created by RERA, Rental Index gives a price range for rents based on location and number of bedrooms. |
| Rental Yield | Rental income a property can generate per year by comparing achievable rent and property value. |
| Lease | A written agreement between the owner of a property and the occupant. |
| Sub-lease | Re-renting of a property by an existing tenant to a new third party for a portion of the tenant’s existing lease contract. |
| Tenant | The individual who occupies a property lease. |
| Landlord | The owner of a property |
| White Goods | Large electrical appliances used domestically, such as refrigerator, cooker, dishwasher and washing machine |
| Snags | Defects or a problem that exists in a property after the construction is completed. |
| Wear and Tear | The amount of damage or wear that could be reasonably expected through ageing and the normal use of your property |
| Security Deposit | An amount of money that is given to the landlord of a property as proof of intent to move in and care for the property |
| District Cooling | Centralised production and distribution of cooling energy that provides buildings |
| Home Orientation | First tour of the property once its near completion. |
Rental Laws In Dubai
Let’s look at RERA’s tenancy laws that govern the leasing market in Dubai:
- Law No. (26) of 2007: Regulates the relationship between landlords and tenants in Dubai.
- Law No. (33) of 2008: Amended certain articles of the Law No. (26) of 2007 and also governs the landlord-tenant relationship in Dubai. The Unified Tenancy Contract was created under this law.
- Decree No. (26) of 2013: Established the Rental Disputes Settlement Centre (RDSC), which handles all types of rental disputes in Dubai.
- Decree No. (41) of 2013: Regulates the activity of leasing out holiday homes in Dubai.
- Decree No. (43) of 2013: Specifically governs rent increase in Dubai.
There are two types of residential property rentals in Dubai: short-term and long-term rentals. Let’s take a look at their differences.
| SHORT-TERM RENTALS | LONG-TERM RENTALS |
| Leasing out a furnished property based on a short-term basis | Leasing out a furnished or unfurnished property on a long-term basis |
| Rented out daily, weekly or monthly | Rented out yearly |
| Maximum time-period is six months | Minimum time-period is six months |
| Utilities connected (electricity, water, internet, air-conditioning, gas) | Excludes utilities |
| Governed by DTCM (The Department of Tourism and Commerce Marketing) | Governed by RERA (Real Estate Regulatory Authority) |
| Tenants do not require a residency visa | Tenants require a valid residency visa |
So, what exactly does the rental process look like for an agent? It is as follows:
- Look for inventory
- View the property
- Advertise the property on Bayut and dubizzle*
- Arrange for viewings with potential tenants
- Submit potential tenant’s offer to landlord
- Create tenancy contract
- Have both parties sign the tenancy agreement
- Assist with Ejari registration
- Assist with move-in permit
*When advertising your property on Bayut, use Profolio™’s quality listing metres to ensure that your listing is high quality, or green colour.
A quality listing:
- Has a title of 40-80 words
- Has a description of minimum of 300 characters
- Has the required number of photographs (based on property type)
- Has a Floorplan assigned (available on Profolio™)
Creating a contract is also easier with BrokerPad, Bayut’s very own CRM! You can also keep track of contract renewal dates and manage your tenancy renewals on this platform. Find out how you can leverage Brokerpad’s array of features in our guide to Brokerpad!
Documents Required
To register a property being rented out, you must obtain documents from the landlord and the tenant. Here are the documents you’ll need for a tenancy contract:
- Emirates ID of the occupant
- Documents from the landlord: Title Deed, landlord’s passport copy with the signature page, Final Electricity and water bill
- Documents from the tenant (individual): Tenant’s passport copy, tenant’s Emirates ID copy, a UAE bank account’s cheque book
Documents from the tenant (if the tenant is a company): Trade licence, passport copy of the authorised signatory, passport copy of the occupant, Emirates ID of the occupant
The following documents are required for Ejari registration:
- From the landlord: Title Deed, landlord’s passport copy with the signature page
- From the tenant: Tenant’s passport copy, Tenant’s Emirates ID copy
- From both parties: Original signed tenancy contract, DEWA premise number (9 digits)
Notice Period For Renewals
A notice must be given by the landlord or the tenant regarding renewals, rent increases and evictions. This is governed by the RERA’s Law No. (33) of 2008. Here are some things to keep in mind:
- Notice period for renewals: Must be given by either party 90 days prior to the expiry of the lease
- Notice period for rent increases: Must be given to the tenant 90 days prior to the expiry of the lease term
- Notice period for eviction: Must be given 12 months in advance by the landlord for the eviction upon expiry of the lease period.
(or)
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Must be given 30 days in advance by the landlord for eviction during the lease term, if the tenant breaches the terms of the tenancy contract.
Evictions
An eviction is the legal removal of the tenant from the rental property by the landlord. Here are the legalities on eviction you need to know:
Evictions During the Lease Term
In Dubai, the legal reasons for evictions during a lease term include:
- If the tenant fails to pay the rent within 30 days of notification from the landlord
- If the tenant sub-leases the property without the permission of the landlord’s consent
- If the tenant uses the premises illegally or immorally
- If the premise is deemed dangerous and likely to collapse, after receiving a technical report from the Dubai Municipality
- If the competent authority needs to demolish the building as part of urban development
In this case, the landlord must notify the tenant in writing through Notary Public or Registered Mail, within 30 days
Eviction notice at the expiry of the lease term
The landlord may demand eviction of the tenant after the expiry of the lease term. Reasons for eviction, in this case, are as follows:
- If the landlord wants to sell the property
- If the landlord wants to recover the premise for personal use or by next of kin (of the first degree)
- If the property requires demolition or major renovation (requires approval of the Dubai Municipality)
In this case, the landlord must notify the tenant in writing through Notary Public or Registered Mail. The notice period for this eviction is 365 days.
Important Notes On Eviction
- If eviction has been granted for personal use, the property cannot be leased: 2 years for residential units and 3 years for commercial units
- If eviction is not granted, tenant has automatic right of renewal
Guidelines On Rental Increase
The RERA rental index groups properties based on the unit’s types, locations and sizes. Rental increases are permitted for properties with a current rent below 90% of average rent.
You can find the rental index on the DLD’s Rental Index page, or Dubai REST Smart App: https://dubailand.gov.ae/en/eservices/rental-index/rental-index/#/
Rental Increase Guidelines
Increase in rent is regulated by the Rental Index set by RERA.
- If the rent is less than 10% less than the average rental value of similar units, the landlord cannot increase the rent.
- If the rent is 11 to 20 % less than the average rental value of similar units, the landlord can increase the rent by 5%
- If the rent is 21 to 30 % less than the average rental value of similar units, the landlord can increase the rent by 10%
- If the rent is 31 to 40 % less than the average rental value of similar units, the landlord can increase the rent by 15%
- If the rent is more than 40% less than the average rental value of similar units, the landlord can increase the rent by 20%
At our Bayut Academy workshop, we share interactive exercises for attendees to try their hand at calculating the rental increase of properties. Register for the next session to experience this first-hand
Rental Dispute Centre
The RDC, or the Rental Dispute Center, is a judicial system in Dubai that specialises in settling all rental disputes between landlords and tenants in Dubai (excluding DIFC).
The RDC attempts to settle all claims within 75 days.
Rental Dispute Center Fee
The party filing a dispute can demand financial compensation or eviction.
The party who registers the complaint:
- Financial compensation: has to pay 3.5% of the annual rent
- Minimum fee: AED 500
- Maximum fee: AED 15k
- Eviction: Has to pay AED 20k
To Be A Rental Legend:
- Understand all the leasing regulations thoroughly
- Update yourself on the market’s performance
- Price your inventory correctly
- Ensure the property is easily accessible
A successful real estate career is a product of consistent learning. Join us for our in-depth workshops at Bayut Academy to enhance your knowledge and skills for the real estate industry. You can also explore our library of resources on our Content Corner, on the Agent Portal.