Wednesday, April 25, 2012

Thinking of a Dubai Property Rental? Here's a checklist that saves you from being somebody's fool!


April 2012 has brought some great news to those looking at apartments for rent in Dubai. The property slump that coincided with the economic bubble burst has served to sober down the inflated property prices that had become the norm in recent years. The residential market appears to be bottoming out and the trend is here to stay, as developers release newer units into the market that further serve to keep the prices of existing units in check. Such is the sentiment in the market that rates are lower by up to a fourth of the rates that were prevalent just a year ago. The decline in rates has been the strongest in the apartment segment with Tier 2 & Tier 3 areas being the most susceptible to a rate drop. In-fact, reports are starting to pour in that suggest rates in certain areas dropping to the lows that were observed in late 2007 through till early 2008! A phenomenon that would have been declared insane and unconceivable, just a year or two ago! 

As newer properties get released into the market stock, the pressure is beginning to rise on those that are located in sub-prime areas or apartments that are lacking in a great view, amenities, connectivity, maintenance, etc. The entire Dubai rentals segment is witnessing the phenomenon where people are choosing to upgrade to better properties, in prime locations and with better amenities. As this demand grows stronger, stray incidents are beginning to emerge, where people have had to rethink their upgrades after having moved in, often with far reaching repercussions. To help avoid becoming somebody’s fool, one need’s to follow a checklist like the one below, if they’re thinking of a Dubai property rental:

One may be tempted to save some more money and prefer to deal direct with the landlord, minus any intermediaries, say an agency for example. The rents may be low and the terms and conditions attractive too. Although tempting, one must tread cautiously in such cases. Properties can be mortgaged and the lender could hold a lien over them. In such cases, if the landlord were to default on their payments, it is the tenant who could find themselves displaced midway through their contract! It therefore becomes prudent to verify the ownership of the property being rented. A great place to begin this would be at the Dubai Land Department (DLD).

The realty segment was in turmoil at the end of last year. A particular developer had stirred up the hornets nest with a controversial move revoking tenant access to community facilities such as the club house, gym and the common beach areas. According to reports, the developer had exercised their right to recover outstanding dues that were to be received from property owners. Unfortunately, it was the tenants who ended up being barred from their own apartments, despite having cleared their rents in full, as per the agreed schedule. While the matter was quickly resolved with the authorities stepping in and smoothing things out, it did highlight an important issue. When renting a property, one must first seek and secure a confirmation from the landlord stating that there are no outstanding dues to be settled with the developer.

The Dubai Land Department (DLD) encourages tenants and landowners alike to register their rent agreements with them. Such a move guarantees, the landlord as well as the tenants, an extra safety net, should there be any disputes that arise during the course of the contract.

A common mistake that many greenhorn renters make is that they take considerable time moving into their new accommodation. A contract when signed is binding on the tenant. If they were to delay their arrival and the living conditions were to generate in the meantime, it leaves the tenant in a fix. Such situations often lead to unsavory disputes as the landlord too is in a position to dispute the conditions, citing the satisfactory inspection approval by the tenant at the time of signing the contract.

Tenants often rush into contracts with just a cursory glance at the fine-print. It is only when things start to go wrong that they realize, that the devil lies in the details. By then, it is already too late and they are reduced to beating a sorry retreat while licking their wounds. Irrespective of whether one is looking to move into their first rental home or if they are a veteran of multiple contracts, one must always discuss the various clauses included in the contract. Period!

Stories of landlords using the deposit amount as an extra bonus have long become the stuff of legend. The advancement in technology has made it rather simple to find an amicable solution to this problem. Mobile-cameras have become rather good at clicking clear images & shooting videos. They can easily be used to document the condition of the apartment a few days prior to handover, should the landlord refuse to be present for a joint inspection. One the outside chance that one hasn’t upgraded to a quality handset, remember that most standard point-and-shoot cameras too do the job and are cheap enough to boot!

2 comments:

  1. Numerous specialists feel that the time has come to reinforce the property business area with mergers and acquisitions and different method for collaboration and cooperation. While some fear the impacts, others say it would be useful for business in general as it would fortify the part on a general premise. Since Dubai had been seeing a few instances of default on top of the line properties, it was even evaluated that the Government would authoritatively venture in sooner or later to arrange the merger of coming up short organizations. This has not happened yet on the other hand, and the destiny of the organizations and the ventures still rests with the open business sector. akoya drive

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