Dubai Landlord Renewal Charges: Are Extra Admin Fees Legal?

Tim Elliott (0:00)

This is the Morning Drive at Mira Business FM, my next guest podcast about Real Estate Weekly. Does it here as well, actually? I've just realized what I was saying there. Dubai Property Podcast, and you're on here. You can't get away from being in front of microphones, Mario Volpi.

Mario Volpi (0:15)

Well, I try not to do it on purpose, but it's a necessity, I'm afraid.

Tim Elliott (0:20)

It is. You also wrote a column for The National Weekly. Mario is a senior manager at Eva. Is it Eva or Eva?

Mario Volpi (0:26)

You've asked me that a couple of times. No, I say Eva. I must try and listen.

Tim Elliott (0:32)

That's what it is.

Mario Volpi (0:33)

Eva, I say, but I guess Eva. Whatever you liked, Tim.

Tim Elliott (0:37)

Thanks very much. Appreciate it. Eva Real Estate here in Dubai.

Let's jump straight in. I have a question for you to begin with, and I'm pitching you as like the agony. I nearly said agony aunt. You'd be the agony uncle for this purpose. Okay. And this was in Gulf News this week. I think it was Monday. Dubai rent renewal, what can your landlord actually charge you? And it was a report about in modern parlance, a friction point for Dubai residents, that great phrase that we all use during lease renewals. And it was extra admin or renewal charges that maybe landlords or real estate agents charge. And I ask you this because for a long time, where I used to live, every year I used to have to pay a renewal fee. I think I do actually now as well.

I have to check that because I should know. But I always used to wonder, and the real estate agent would come, who acted on behalf of the landlord, would come around to the house and say, you know, this is what we're doing de la de, and we would work out the rent for the next year. And he'd say, oh, and here's the receipt for the renewal fee. And I used to sit there and think, what's that really for? And it was a thousand dirhams a year. But it's not, it's a practice rather than a rule, isn't it?

Mario Volpi (1:49)

Correct, yeah. Look, the Land Department actually states or ERA states that there should not be any charges.

But if you're making a commercial movement or you're doing something, then I guess, I've got to look at it from the agent's point of view, are you then expecting that agent to do the renewal, to draw up the tenancy agreement, perhaps even do the Ejari for you again, maybe?

For free, are you expecting that? Because if someone is making a commercial situation, why is it then that they're not allowed to charge fees for it? And actually, this article says that if you, I guess, if you renew and nothing happens, let's say it's a two-year lease, right? I mean, technically speaking, you're not renewing because the second year isn't up anyway. So if the agent isn't doing anything, there's no contract, there's no negotiations, everything remains the same, then I would argue that actually this report is correct. But if you're asking an agent to engage in a commercial transaction where they have to organize paperwork and they might have to run around to get signatures, I know you can do it online now. You can sign things online. But certainly, collection of checks, if we're still collecting checks and not going through certain systems, then there's a commercial situation there. And why shouldn't the agent charge? Also, it needs to be put on to the contract anyway that renewal fees apply, and those charges are 1,000.

Tim Elliott (3:32)

Well, this is the thing. And I'm not absolutely convinced that those were on there. And it's my fault, so buyer beware, I suppose.

But I do remember having them to run off and do the Ejari. So that wasn't part of the service. So it literally was. I'll retype your contract and accept the checks from you, give them to the landlord, and then I'll come back with your signed contract.

Mario Volpi (3:55)

Yeah, look, we can talk about this for a while. And whilst I know it's a friction point, any kind of sort of charges or fees, nobody likes to pay them. Let's be fair.

But it is not correct to expect an agent to work for nothing, despite the fact that when it comes to rents, often the tenant seems to think that they own the agent, and therefore anything goes. We talked about that last week from the point of view of maintenance and as and when the person can actually call the agent. I always maintain that unless the agent or agency has a maintenance contract, the relationship doesn't stop, but the job is done once the contract is signed, not even moved in. That's often why an agent will ask for three payments, the deposit, the rent checks, and the commission at the point of signing. When you sign the contract, that the job of the agent has actually stopped, as I say, unless he manages the property.