Deadline approaches for licensed holiday homes in Dubai

Dubai holiday homes operators will need to be licensed within two weeks under rules revealed yesterday.

Acting on a December decree, the Dubai Department of Tourism and Commerce Marketing (DTCM) will initially accept applications from operators who want to manage 20 or more holiday homes in their portfolio. Holiday home owners in the emirate will need to let through one of these licensed groups.

The DTCM did not disclose the process for holiday home owners to become licensed but a spokesman confirmed it would cost Dh110 per application.

Only licensed operators will be allowed to manage residential properties as holiday homes from June 15.

As the licensing authority DTCM will also assess an application based on its location and proximity to key tourism infrastructure on a case-by-case basis.

There will be an additional fee for the final license to become an operator.

Operators are being asked to apply for initial approval, following which they have three months to align their services and properties to DTCM requirements for final approval. Homeowners with 20 or more units can also apply to become licensed operators themselves.

The law applies to those who want to turn their furnished residential properties into holiday homes as an alternative form of rental income. They should be leased out as a whole unit on a daily, weekly, monthly or annual basis. Such properties will not require the Ejari tenancy contract.

“Visitors booking their accommodation through licensed operators will have the assurance that the accommodation they are booking has been classified in line with global best practices,” said Khalid bin Touq, the executive director of licensing and classification at DTCM. “Owners of properties will benefit from the expertise and marketing capabilities of the operator.”

The licenses will be granted in select areas, according to the December decree, and will classify these properties as either “standard” or “deluxe”.

The directive would help to regulate the holiday homes market, said Filippo Sona, the head of hotels at Colliers International’s Dubai office. Currently there is no contract between the property owner and the guest to safeguard the rights of the individuals involved.

“The licensing was born out of a need to regulate, monitor, control and safeguard the tourists and make sure the offerings are safe,” he said. “Consumers can be assured the property is inspected and there is a quality guarantee. Some property owners may not like it because fees and charges can take away some of their profit, but if licensed they can also charge more money.”

The concept of holiday homes in Dubai has been around for the past 15 years, coinciding with the rise of the tourism and real estate sectors, especially in the new areas of Dubai Marina and the Palm Jumeirah.

Holiday homes have grown throughout the emirate in recent years and have become especially popular with large families as an alternative to what can be prohibitively expensive hotel accomodation.

Four-bedroom villas for a five-day stay currently rent for more than Dh25,000 on the Palm Jumeirah, according to MyDubaiStay.com, which also lists holiday homes for rent in Downtown, Dubai Marina, Jumeirah Lakes Towers and Jumeirah Beach Residence.

Imran Latif, who started My Stay Group and MyDubaiStay.com in 2005 and now manages about 100 apartments and villas for the owners, agrees.

“The law has been in consultation since 2010 so it’s good news that it is now released, and the industry is properly recognised. Owners and guests can be assured they will only be dealing with professionals officially licensed by the DTCM [as] Dubai continues to grow as the hub for tourism in the Middle East,” Mr Latif said.

“Some people were charging high rents and services such as how often it is cleaned and where it is located were left at the discretion of the owners,” said Mario Volpi, the managing director of Prestige Real Estate in Dubai.

The regulation is expected to bring in professional players and standardise the holiday homes market besides increasing the accommodation offerings in Dubai.

“Dubai is building a lot of touristic attractions but there are not enough hotel rooms, and it takes three or four years to build a hotel,” Mr Volpi said. Around 10 per cent of the company’s portfolio can be classified as holiday homes.

Almost all real estate companies have a small portion of their portfolio in the holiday homes market. Dubai has more than 2,000 registered real estate brokers and 184 property management companies.

ssahoo@thenational.ae