Renting in Dubai: Can your agent legally charge an annual renewal fee?

Question: I wanted to check the legality of the renewal fee that my real estate agent insists on collecting every year for my rented apartment in Dubai. My contract does not specify this charge. How can I contest it? I have shown my agent articles online, stating that the collection of this fee is illegal.

Answer: Pursuant to your queries, since you reside in the emirate of Dubai, the provisions of the Dubai rent law are applicable.

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In emirate of Dubai, the relationship between a landlord and a tenant is governed by a tenancy contract. This contract must clearly state the details of the property being rented so there is no confusion, the purpose for which it is being rented, the duration of the tenancy contract, the rent amount and the mode of payment. This is in accordance with the Article 4(1) of Law No. (33) of 2008 Amending Law No. (26) of 2007 Regulating the Relationship between Landlords and Tenants in the Emirate of Dubai.

“1. The contractual relationship between a Landlord and a Tenant will be regulated by a tenancy contract which includes a description of the leased Real Property that leaves no room for uncertainty; the purpose of the lease; the term of the tenancy Contract; the Rent and its payment method; and the name of the Real Property owner if the Landlord is not the owner.”

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Further, unless the tenancy contract specifically provides otherwise, a tenant is responsible for paying any government fees, charges, or taxes that arise from the use or occupation of the rented property. Additionally, if a tenant sublets the property (where permitted), a tenant will also be responsible for any government fees or taxes associated with such sublease. This is in accordance with the Article 22 of the Law No (26) of 2007 Regulating the Relationship between Landlords and Tenants in the Emirate of Dubai which reads as follows: “Unless the tenancy Contract states otherwise, the tenant must pay all fees and taxes owed to government entities and departments in relation to the use of the real Property, and must pay the fees or taxes prescribed for any sublease of the real property.”

Based on the aforementioned provisions of the law, the rights and obligations of a landlord and tenant are primarily governed by the terms of the tenancy contract. Since your tenancy contract does not contain any provision requiring the payment of an annual renewal fee which the real estate agent wants to charge you, there appears to be no contractual basis obligating you to pay such fee.

However, you may review any brokerage agreement, agency agreement, or other document executed between you and the real estate agent. If such agreement expressly provides for the payment of an annual renewal fee for the renewal of the tenancy contract, then you may be contractually bound to pay the same in accordance with the agreed terms between you and the real estate agent.

In the absence of any such contractual provision, if the real estate agent continues to insist on collecting the renewal fee, you may consider escalating this matter to the Dubai Land Department - Real Estate Regulatory Agency, for appropriate review and action.

Applicable law:

1. Law No. (26) of 2007 Regulating the Relationship between Landlords and Tenants in the Emirate of Dubai

2. Law No. (33) of 2008 Amending Law No. (26) of 2007 Regulating the Relationship between Landlords and Tenants in the Emirate of Dubai

Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom and India. Full details of his firm on: www.amalawyers.com. Readers may e-mail their questions to: news@khaleejtimes.com or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.

Disclaimer: The information provided above is intended for general guidance and does not constitute legal advice. It is recommended to seek formal legal counsel.