Can Dubai property agents charge Dh1,000 for renewing tenancy contract?

Property expert Mario Volpi advises on whether agents can charge the "admin fee, or if the landlord should pay it.

Mario Volpi advises on the subject of property agents charging renewal fees. Pawan Singh / The National

I am in the process of renewing my rental contract. I live in Dubailand and have been in my apartment for just under one year. Since I moved in, the apartment has been sold and the new landlord lives abroad and has commissioned an agent in the UAE. The agent is now trying to charge us Dh1,000 to renew our contract as an "admin fee". I have not agreed this previously and the current contract (with the old landlord) says nothing about fees being payable on renewal. So, does the agent have the right to charge this? I have read that landlords should pay this fee, not the tenant, but the agent is basically forcing us to pay before renewing the contract. VA, Dubai

It is common practise for agents to charge a fee when doing a renewal. The renewal will involve work on the agent’s part, for example negotiations with the landlord and tenant, producing the new contract, getting signatures and collecting and distributing rental cheques and so on. The charge for this can vary from Dh500 to Dh1,500 depending on certain circumstances. I am aware that Rera has said it is illegal to charge renewal fees, but this is a commercial agreement between landlord and or tenant and if either of these parties request the services of the agent they are expected to be paid for such work. In theory the cost should be paid equally by both parties as both will be benefiting from the “transaction” but this is down to pure negotiation as to who actually pays this fee.

I renewed my tenancy contract in November, and at the time the landlord asked me to sign a letter giving me notice to leave at the end of the 12-month tenancy. This was his condition for renewing the tenancy, hence I believe he made me sign under duress. Secondly the reason for eviction was vague as it was mentioned that the landlord wishes to sell or upgrade the villa. Do I have a case to stay in the property for an additional year as notice was not served in a legal manner and also without a specific valid reason? NM, Dubai

Although you have signed what is effectively known as a vacating letter, this should not be regarded as legal as you have signed it as part of your renewal process and, arguably, you were made to sign. Firstly, the landlord cannot serve you notice in this way. If he wants to sell the property, this is allowed, but he needs to give you 12 months’ notice by notary public or sent by registered mail. These are the only two ways of serving a notice legally.

Secondly, any vacating notice has to be done for a specific reason. If he wants to upgrade the villa, this is allowed but upgrades should also be followed up with municipality notices giving consent to this work if it is major enough for you to be requested to leave. It appears your landlord is just trying to get vacant possession, so I would stick to your guns and request that if he is to serve you notice for the correct reasons he needs to do so in the proper manner.

We signed our new tenancy contract a month ago and handed over a cheque for the full amount. The leasing company has not had the contract signed by the landlord as they said they cannot reach him. They have been in possession of the contract and cheque for a month now. My concern is that I need the signed contract to collect the funds from work as they supply me with a housing allowance. I will not receive my allowance unless I give the accounts department the signed contract, and my deadline is the end of this week. What are my rights? ES, Dubai

There are a number of issues here if the agent cannot find the landlord as if you do not get a signature on the contract it may be difficult to connect to Dewa or register at Ejari and so on. There is not a great deal that can be done without a signed agreement. If the agent is not able to locate the owner for a signature then, unfortunately, your best bet is to request your cheque back and look for another property. If, however, you are already in the property, I would not worry, as presumably, sooner or later the landlord will want his money and will obviously get it from the agent you lodged the funds with.

Mario Volpi is the managing director of Prestige Real Estate in Dubai (prestigedubai.com). He has 30 years of property industry experience in the emirate and London. Send any questions to [e-mail]

The advice provided in our columns does not constitute legal advice and is provided for information only. Readers are encouraged to seek appropriate independent legal advice

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