Abu Dhabi landlord demands fee just to negotiate rent increase

Abu Dhabi tenant asked to pay Dh300 to renegotiate the rent is being taken for a ride by the agent, says property expert Mario Volpi.

Mario Volpi advises an Abu Dhabi tenant who has been told he will have to pay a fee to negotiate a rent hike. Ravindranath K / The National

I live in Abu Dhabi and received notification from my landlord of a 15 per cent rent increase to renew my lease. The increase is too high and I requested an opportunity to negotiate the rent with the landlord. I have been told by the landlord's managing agent that I will have to pay a fee of Dh300 to renegotiate the rent because I did not respond within seven days of the rent renewal letter issued by them. Is it legal for them to charge a fee to simply negotiate the rent? BH, Abu Dhabi

The first thing I would like to point out is that your landlord does have the right to request this size of increase on the next rental contract, as the Abu Dhabi government abolished the rental cap at the tail end of 2013. However, I have mentioned in my columns before how it never ceases to amaze me how inventive some landlords and agents are when it comes to rental increases. Your case adds to my bewilderment. The first question I have is; was there any mention in their original renewal letter to you that if you did not respond by a certain time there would be penalties or consequences? If not, then this charge, which they have added seems a little ridiculous to me, and just adds to the frustrations when having to go through this process. Of course there is no legal obligation to charge to negotiate with your landlord. I do understand that agents have administrative charges when having to prepare new contracts and collect cheques, but to charge to effectively make a couple of phone calls seems unfair and definitely not correct. I suggest getting in touch with the agent and requesting the contact details of the landlord so you can speak with him directly and save yourself the money.

Are non-renewable rental contracts enforceable? I have a landlord who is using it to up my rent by 25 per cent after four years. SD, Dubai

Non-renewable clauses in tenancy agreements are not legal and not enforceable. Furthermore your landlord cannot increase the rent by 25 per cent, as the most allowed by law in Dubai in any one given year is 20 per cent. Even then, this increase has to be communicated to you in writing, giving you at least 90 days' notice from the expiry of your agreement and only if it was permissible by the Rera rental calculator.

We have been interested in a family villa. The agent came around to our current house and said we had to pay a security deposit. But she also said that if we did not take the property that the cheque would be returned. The cheque was written in the name of the landlord. The agent said the cheque would be held in a safe at their offices and would not be given to the landlord, and if the contract was not signed by both parties, then the agency would give me back the cheque. Anyhow, we did not agree contract terms and for that reason my wife and I do not wish to proceed with the property. Can you confirm if the agency should be returning the cheque to us as they said they would? What is the law in an instance such as this? I did get a receipt which says security deposit on it. TR, Dubai

Check the paperwork and receipt to see if there is any reference to the deposit such as non-refundable or refundable security deposit. If there is no reference to the refund and they have verbally stated that the deposit will be returned, then you have to assume you will get your money back. It is harsh for some landlords or agents to retain the deposit when the deal does not happen, especially if a contract has not been signed. Each situation is different and has to be judged case by case, so I am not making a generalisation on all possibilities as sometimes it is legitimate for a deposit to be retained by the landlord.

Mario Volpi is the managing director of Ocean View Real Estate and has worked in the industry in the emirate and in London for the past 30 years. Send any questions to [e-mail].

The advice provided in our columns does not constitute legal advice and is provided for information.

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