Short-term property rentals in Dubai - are they allowed?

Mario Volpi advises on whether a property can be rented out on a short-term basis whether it's as a holiday home or a short contract.

Mario Volpi advises on the latest property issues in Dubai. Antonie Robertson / The National

What are the rules regarding short-term rentals in Dubai? Some people advertise their units on sites for weekly stays? So, as the owner of an apartment in Dubai, can I rent it out on a short-term basis? AK, Dubai

Anyone who owns residential houses and apartments in Dubai can now rent out their property as holiday homes on a daily, weekly, monthly or annual basis, without the need for an Ejari-regulated tenancy contract, provided they use the services of a licensed operator who in turn has been authorised by Dubai’s Department of Tourism and Commerce Marketing (DTCM).

Decree No 41 of 2013, which regulates the short-term or holiday rental market, was introduced last June, stating that residential properties for use as holiday homes will be restricted to licensed operators only. If owners wish to rent out their properties on a holiday-let basis directly, they would have to themselves register with the DTCM as an operator. To register, there are certain criteria that have to be met, although an individual with fewer than 20 properties in his or her portfolio cannot at present register as an individual operator. Instead they have to use the services of an agent, who will have more than the required number of properties and is also licensed. Fill in the application form and attach passport copies, identity card, relevant work experience and educational certificates together with a recent good-conduct police certificate. Naturally there is a fee involved, and more details can be found on the visitdubai.com website.

The main reason the government wishes to regulate this growing industry is to ensure easy classification and grading and to maintain certain standards, such as cleanliness, services provided, health and safety. With more hotel rooms needed as we get closer to Dubai Expo 2020, this initiative, to open up the holiday let market, is seen as a positive step. Be aware, though, that anyone renting out their home without this license, can be penalised with fines. This is to ensure that quality standards are maintained and policed.

I was given a (notarised) 12-month eviction notice on the basis that the landlord was selling the house in February this year. This was for my current contract, which expires on February 2016. Now, just before the contract expires, I have received an mail from the agency that represents the landlord saying that he is still searching for a buyer and wants to know if I would like to renew my contract for another year at Dh151,800. This is a 10 per cent increase on my current lease and in line with the rental increase calculator. I want to know:

1. If I say that I want to renew, will that make the notice void and therefore I cannot be evicted?

2. If I move out as per the eviction notice, is he allowed to rent or does he have to observe the two-year rent blackout? RP, Dubai

Let me answer your questions as posed:

1. If you renew, then the eviction notice does become void given the change in circumstances and agreement between both parties that you will remain in the property. Saying you will not be evicted is correct, but obviously not forever. You will be entitled to stay for the duration of this new agreement, but the owner may issue you another 12-month notice to vacate upon expiry of your current term.

2. If you decide to move out, the landlord will still be entitled to find another tenant because you leaving will now be your choice given your landlord is asking if you wish to renew – even with an increase in rent which is in line with the Rera rental calculator.

Mario Volpi is a real estate professional who has worked within the industry for the past 31 years in London and Dubai. Please send any questions to [e-mail]

The opinions expressed in this article are those of the author and they do not reflect in any way those of the institutions to which he is affiliated. It does not constitute legal advice and is provided for information only.