I am a tenant living in Dubai. My rent has been Dh80,000 and my renewal was due in January. The landlord has contacted me to say that the rent is increasing by 10 per cent although I did not think he could do this to me. He is insisting that the rent must increase. I have not renewed my contract and I want to leave now, but he says I must pay a penalty of two months’ rent even though I have not signed a new contract. Can you please advise me where I stand with this issue and do I have to pay the fine? J A, Dubai
If any landlord wishes to increase the rent payable they must give their tenant 90 days' notice. Even if the increase is in accordance with the Real Estate Regulatory Agency (Rera), proper notice is required. If a landlord, or a tenant, does nothing about the renewal until after the renewal date, then it is assumed that the contract will renew on the same terms and in the same amount as before. This means that a tenant is also bound by the terms and cannot just walk away. If the contract specifies that the tenancy can end early if a penalty is payable, then this is enforceable. The lesson for both parties is to act in a timely manner and provide the proper notice well before the tenancy renewal date.
Keren Bobker is an independent financial adviser with Holborn Assets in Dubai. Contact her at keren@holbornassets.com
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Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
