The boom which the UAE economy began to witness due to the sharp rise in oil revenues made the country strive to develop basic structures and infrastructure. This led to waves of influx of foreigners to major UAE towns and cities, looking for greener pastures, and a simultaneous sharp rise in the demand for housing and accommodation.

The continuous migration of the UAE nationals themselves, from rural to urban areas, compounded the housing problem that major cities like Abu Dhabi and Dubai began to face from the early 1990s on. This led to an automatic rise in rent, on the one hand, and opened the way for the real estate business to flourish on the other. But then, it also gave an opportunity to the landlords to make the maximum on the properties which had cost them so much to build, and in accordance with modern international standards and in relatively record time.

That may be seen as normal business principle and practice. What was abnormal was the way these landlords frustrated with impunity the efforts of the UAE government to organise the affairs pertaining to living conditions in the country. Especially the issue of housing and accommodation. In order to make maximum profit, these Shylocks seized the opportunity to slap high rents for their apartments and villas, right under the nose of the “Khalifa Committee” which was supposed to stamp its authority and bring some sanity and order into the whole affair.

The initiative to set up a special committee to supervise the commercial buildings in Abu Dhabi began with the establishment of the Abu Dhabi Building Credit Corporation. With the sharp increase in building and construction activities, the President, His Highness Shaikh Khalifa bin Zayed Al Nahyan, mooted the idea of setting up a special body to supervise the building and construction sector. This idea was translated into action in 1981 when the Department of Social Services and Commercial Buildings, (the Khalifa Committee) was established.

Since then the “Khalifa Committee” has executed more than 6,000 projects at a total cost of about Dh35 billion. These projects, which include 100,000 housing units, are not limited to Abu Dhabi alone, but extend to other parts of the emirate, including Mussafah, Shahama, Al Ain, Madinat Zayed, Liwa, the Western Region and many other places.

“The Khalifa Committee” deals daily with hundreds of customers, who rush to rent new accommodation or renew their housing contracts. In view of the fact that the committee is in charge of administering 90 per cent of all the buildings in Abu Dhabi, one can imagine the volume of work the administration of this department is burdened with.

In deciding on review of rent charges periodically, the “Khalifa Committee” allows the basic economic principle of demand and supply to rule. The department has a special rent committee that meets twice a week to decide on the rent charges of housing units and apartments.

As tenants and prospective tenants cry over the suffocating rents in the glaring eyes of the “Khalifa Committee”, which looks on helplessly or rather passively, voices calling for the privatisation of the Committee continue to gain popular support as a form of protest against its passive approach to the plight of the tenants.

There are many instances when the frustration of the tenants can be gleaned, going by their versions.

“In the past, we used to go to the ‘Khalifa Committee’ whenever we faced difficulties in getting apartments, which we easily get at reasonable prices under any circumstance. But now the Committee is useless because you will not have choices to make, so the only alternative is to go for a search in the local dailies’ advertisement pages for your choice of accommodation,” said Bashar Al Zayyat, an Arab expatriate living in Abu Dhabi for the past nine years, who is now looking for a new accommodation to house his bride.

“When you get the apartment of your choice, the next problem will be the high rent charges and other petty expenses involved, including of course, the transfer fee,” he added.

Another young expatriate who earns a monthly salary not exceeding Dh3,000 wondered how he can get a “studio’ accommodation in Abu Dhabi when both the landlord and real estate agents are calling the shots in every stage of the bargaining negotiations. “Besides all these, the occupant of the apartment demands a transfer fee before he agrees to cede the apartment to you,” he lamented.

Reacting to the issue, Arif bin Hreith, Manager of Al Ain-based Siraj Real Estate International Agency, said the issue of transfer fee is just the tip of the iceberg.

“The provision of government accommodation is now getting less at a time when rents are swelling because landlords continue with hikes. As for ordinary people, they really do not know what to do,” he said.

Suggesting a solution, Arif expressed the hope that the government would give serious attention to the building of single-room apartments for bachelors and low-income group so as to solve the problem of accommodation in the country, particularly in the emirate of Abu Dhabi. He called for the setting up of a rent committee in every emirate to deal with the issue.

He also downplayed the claim that the high rents were due to demand exceeding supply.

“The supply is more than the demand, but the problem lies in landlords who continue to increase the rent at a time when people are crying for shortage of money in the system,” he said.

He refuted the allegation that real estate agencies share the blame for the high rents due to the brokerage they charge. “We only charge some small amount of money which we take from only the landlords,” he said.

Madam Clair, another real estate agent, said her agency collects only the legally specified brokerage for guiding tenants to the accommodation of their choice. Asked to comment on the Dh100 fee agencies charge before taking a client to see personally apartments, she said she does not take anything for that. “The market is open and everybody works according to his own rule,” she said. “But if someone out there is foolish enough to make such a payment to an agent or to pay a transfer fee then it is his own problem. “The law does not protect the fool, does it?” she asked.

Nael Al Alim, a journalist, narrated  how his friend was duped by a person who deals with some of these real estate agencies. He said one of his friends paid Dh100 to a broker who turned out to be a swindler.

“The broker collected the money as a guidance fee to show my friend the apartment after agreeing against his will to pay a transfer fee. But my friend was shocked to be told later by the door-keeper of the house that the apartment had already been rented out,” he said.

Sayyid Mohammed Ali, who also works for a real estate agency, said about the transfer fee: “Whatever is being practised according to norms is just like what is set by a precondition”, quoting an Arabic adage. He wondered why persons who have no licence would be allowed to place adverts in the newspapers while, in contrast, the “Khalifa Committee” urges people to avoid dealing with real estate companies although the latter has been licensed by the government and regularly pays license fees and other taxes.

“The real estate market is just like an economic indicator, but some irresponsible journalists tarnish our image and in turn the reputation of part of the national economy,” he said. “Instead of  striving to improve relations between us and our clients, they resort to attacking us,” he added.

Ali’s attack did not end with journalists alone, as he vented his anger on Arab clients in particular. “The Arab mentality does not understand the significance of real estate agency. See how non-Arabs, particularly Westerners, come to us to process their housing procedures by refusing to do so except through real estate agencies. What is happening in the market now would spawn and open the door for swindlers. It is easy for a conman to know that there is a vacant apartment in a building, collect from innocent and gullible clients some advance payments and vanish into thin air,” he said, adding, “what we do is to provide our service to those who have no time to go around looking for the appropriate apartment. “We have been marketing the Khalifa Committee for just a fee of five per cent of the cost of the total rent contract,” he said.

Ali blamed the media for portraying the real estate agencies as cheats. He said this made clients to deal with the door-keepers, whom he described as “thieves who lack credibility”, instead of dealing with them (real estate agencies). He said the latter had been given a raw deal as nobody had given them the chance to defend themselves against the unfair charges against them, nor the chance to say what their problems are or to make suggestions on issues of concern to them. He expressed the hope that such an opportunity would be given to them in the future.

Article 742 of Chapter 1, Clause 2 of the UAE civil laws stated and defines explicitly the meaning of rental contract, just as Article 777 of the civil transactions law clearly states that “the lessee shall not overuse the leased item beyond the limit agreed in the lease contract. In the absence of such an agreement, the items shall be used according to what it has been designed for and according to the normal practice”, while Article 784 of the law says: “The lessee shall return to the lessor (landlord) after expiry of the period of agreement the item in the same condition that the lessee received it unless if the item had been destroyed or damaged due to reasons that the lessee has no hand in it”.

Considering the above laws, it is very clear that the so-called “transfer fee” is illegal. And since this is the case, why then is it allowed for such opportunists to violate the laws of the state with such impunity by placing adverts in the local dailies. A glance at the classified supplement of one of the local dailies clearly displayed the following advert last Friday, openly displaying the cost of annual rent and the “transfer fee”, a specimen of which is as follows:

Annual Rent      Transfer Fee

Dh18,000             Dh6,000

(including furniture)

Dh30,000             Dh17,000

(including furniture)

Dh55,000             Dh10,000

(including furniture)

Examining the above table, one can notice that the cost of the “transfer fee” is sometimes as high as the cost of the annual rent itself. But the astonishing point is that whenever you ask the person who placed the advertisement the reason for charging this hefty sum, his simple but shocking answer is always “This is what I want!” One can also observe from the table that most of those who demand the “transfer fee” resort to a common trick of using the furniture in the apartment as a pretext to charge those exorbitant prices. This is happening under the nose of the law while the perpetrators are allowed to continue to violate the law with impunity.

Perhaps the only bitter solution to this “daylight robbery” is to live far away from the city centre, like in Musaffah, to avoid the financial burden. But in doing so, a new challenge emerges. Perhaps one may need a private car to live all that far, which means major expenses cropping up. Otherwise, one would have to depend on public transport which, in most cases, would not please one’s daily programme. This makes one give a second thought to the issue of living in the outskirts of the town, which the government must give serious attention to in order to ease the congestion. But convincing people to do so could only succeed when a suitable public transport system is made available.