Time to revisit rental contracts?

Landlords and renters alike have problems with the existing rules on tenancy

Homes in International City, Dubai. Paulo Vecina / The National

The UAE has a large expatriate population, which is why it has a large number of rental properties. It follows that tenancy is always a hot topic. Relationships between landlords and tenants are sometimes fraught, especially when the property market is volatile. The latest flare-up has been in Dubai, where more than 30 tenants each in International City and Deira and 20 in Silicon Oasis say that their landlord has given them just a few months' notice to move out. As The National reported yesterday, this is illegal. The regulations require a landlord to give 12 months' notice of eviction.

It would be easy to lay all the blame on greedy landlords. It hsa been suggested that they are only trying to evict tenants because they hope to sell the property. A jump in Dubai property prices last year has been followed by a period of stagnation, with some experts tipping falls in coming months. As rents in Dubai are capped, based on market averages, selling might be a sensible option for some landlords. After all, 12 months is a long time and an individual’s circumstances can change quickly. It is up to the Real Estate Regulatory Agency, which registers rental contracts, and ultimately, for the courts to decide on specific cases. But, perhaps it is time to explore alternatives to the current system. The 12-month leases can create problems for both parties. Some tenants have found themselves in jail because their pre-signed cheques bounced at the time they were cashed. And some landlords resort to attempted evictions because they want to change things around for whatever reason, despite the security of receiving rent in advance, usually via four postdated cheques.

Might a shorter basic term be worth considering? In the UK, for example, a tenancy can either be fixed-term, with rent payable a month in advance, or periodic, which means week-by-week or month-by-month. Either way, there is the flexibility to choose between a long- or short-term agreement and this would seem to benefit both renters, who are unsure about the length of their tenancy, and property owners, who are keeping an eye on their investment portfolios.