UAE Property: Understanding the Application of RERA Rent Index for Furnished Apartments
Renting a property in Dubai comes with various regulations and guidelines that both landlords and tenants must adhere to. One such regulation is the RERA (Real Estate Regulatory Agency) rent index, which determines the maximum rental increase permitted in any given year. However, there seems to be confusion regarding the application of the RERA rent index to furnished apartments. In this blog post, we will explore this issue and shed light on tenants’ rights when faced with unjustified rental increases.
The Misinterpretation of Rental Laws
A concerned tenant recently raised a question about receiving a rental increase notice for their furnished apartment, despite the RERA rent calculator indicating that no increase is permitted. The landlord’s argument was that the RERA index does not apply to furnished units. However, this interpretation is incorrect.
Understanding the Rental Evaluation Process
To resolve this discrepancy and reach a fair agreement, it is advisable for the landlord to utilize the Dubai Land Department rental valuation service. This service will reevaluate the rent and help align it with the market rates, taking into account factors such as location, amenities, and property condition. Following this evaluation, Decree 43 of 2013 will come into effect, which determines the maximum allowable rental increase for the subsequent renewal period.
The Maximum Rental Increase and Tenant Rights
According to the rental laws in the UAE, the maximum rental increase permitted in any one year cannot exceed 20 percent. Therefore, even if the Dubai Land Department rental valuation service suggests a higher rental amount, the increase must not exceed this limit. It is crucial for tenants to be aware of their rights to safeguard themselves against unjustified rental hikes.
Contesting Unjustified Increases
If a tenant still disagrees with the proposed rental increase after following the aforementioned steps, they have the right to contest it through the Rent Dispute Settlement Committee. By filing a case, the tenant can present their argument and evidence to a presiding judge who will make a fair decision. It’s important to note that contesting a rental increase incurs a cost of 3.5 percent of the current rental amount. However, if the judgment favors the tenant, these costs are often added to the claim.
Understanding Building Insurance for Apartment Owners
Another common concern raised by property owners in Dubai is whether separate building insurance is required for their apartments, considering that the service fees already cover insurance costs. If the service charges include building insurance and there is written proof of the same, additional building insurance is not necessary. However, owners should carefully review the policy’s terms and conditions to ensure that the coverage is comprehensive. Any concerns regarding the policy should be addressed with the managing company or owner’s association.
Addressing Neighbour Disputes and Property Rights
Lastly, the blog touches upon a neighbour dispute where one individual encroached upon common property, causing distress to the affected tenant. In such cases, where the management company fails to intervene and the police cannot take immediate action, seeking legal recourse becomes necessary. By consulting a lawyer and filing a civil case, the affected party can present evidence of the disruption to their peaceful enjoyment of the property and seek compensation or resolution.
Conclusion
The application of the RERA rent index to furnished apartments is a topic of contention in the UAE property market. However, it is clear that the index is not limited to unfurnished units, and landlords cannot arbitrarily increase rents beyond the maximum allowable limit. Tenants are encouraged to familiarize themselves with the rental laws, seek proper evaluation of rental amounts, contest unjustified increases through the appropriate channels, and consult legal professionals when faced with property disputes. By understanding their rights and the available avenues for resolution, tenants can protect their interests and ensure a fair rental experience in the UAE.
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UAE Property: Understanding the Application of RERA Rent Index for Furnished Apartments
Renting a property in Dubai comes with various regulations and guidelines that both landlords and tenants must adhere to. One such regulation is the RERA (Real Estate Regulatory Agency) rent index, which determines the maximum rental increase permitted in any given year. However, there seems to be confusion regarding the application of the RERA rent index to furnished apartments. In this blog post, we will explore this issue and shed light on tenants’ rights when faced with unjustified rental increases.
A concerned tenant recently raised a question about receiving a rental increase notice for their furnished apartment, despite the RERA rent calculator indicating that no increase is permitted. The landlord’s argument was that the RERA index does not apply to furnished units. However, this interpretation is incorrect.
Understanding the Rental Evaluation Process
To resolve this discrepancy and reach a fair agreement, it is advisable for the landlord to utilize the Dubai Land Department rental valuation service. This service will reevaluate the rent and help align it with the market rates, taking into account factors such as location, amenities, and property condition. Following this evaluation, Decree 43 of 2013 will come into effect, which determines the maximum allowable rental increase for the subsequent renewal period.
The Maximum Rental Increase and Tenant Rights
According to the rental laws in the UAE, the maximum rental increase permitted in any one year cannot exceed 20 percent. Therefore, even if the Dubai Land Department rental valuation service suggests a higher rental amount, the increase must not exceed this limit. It is crucial for tenants to be aware of their rights to safeguard themselves against unjustified rental hikes.
Contesting Unjustified Increases
If a tenant still disagrees with the proposed rental increase after following the aforementioned steps, they have the right to contest it through the Rent Dispute Settlement Committee. By filing a case, the tenant can present their argument and evidence to a presiding judge who will make a fair decision. It’s important to note that contesting a rental increase incurs a cost of 3.5 percent of the current rental amount. However, if the judgment favors the tenant, these costs are often added to the claim.
Understanding Building Insurance for Apartment Owners
Another common concern raised by property owners in Dubai is whether separate building insurance is required for their apartments, considering that the service fees already cover insurance costs. If the service charges include building insurance and there is written proof of the same, additional building insurance is not necessary. However, owners should carefully review the policy’s terms and conditions to ensure that the coverage is comprehensive. Any concerns regarding the policy should be addressed with the managing company or owner’s association.
Addressing Neighbour Disputes and Property Rights
Lastly, the blog touches upon a neighbour dispute where one individual encroached upon common property, causing distress to the affected tenant. In such cases, where the management company fails to intervene and the police cannot take immediate action, seeking legal recourse becomes necessary. By consulting a lawyer and filing a civil case, the affected party can present evidence of the disruption to their peaceful enjoyment of the property and seek compensation or resolution.
Conclusion
The application of the RERA rent index to furnished apartments is a topic of contention in the UAE property market. However, it is clear that the index is not limited to unfurnished units, and landlords cannot arbitrarily increase rents beyond the maximum allowable limit. Tenants are encouraged to familiarize themselves with the rental laws, seek proper evaluation of rental amounts, contest unjustified increases through the appropriate channels, and consult legal professionals when faced with property disputes. By understanding their rights and the available avenues for resolution, tenants can protect their interests and ensure a fair rental experience in the UAE.