In order to obtain their new “Ejari” rental contracts, Dubai property owners and landlords who are renting out apartments or intend to do so must input information about any modifications they have made to the property. This is in accordance with a recent update that the Dubai Land Department issued.
Entering such information is crucial for property owners, particularly in light of Dubai’s “smart” Rental Index, which was introduced at the beginning of this year. This requires building owners and landlords to base their rents on the building’s “star rating,” which considers the common areas, amenities offered, general property maintenance, etc.
Compared to the previous Index, which was based on the average rental prices in a given area, this represents a significant shift.
In essence, “non-freehold” property assets are covered by the new procedure.
What should property owners do?
* Prior to beginning the tenancy contract process, review the property details section.
The “property, usage, type field” should be updated.
* The system will approve the change if the new usage category corresponds with the Dubai Municipality’s official records. and give the landlord permission to create or renew the tenancy agreement.
* When the property is unoccupied, landlords are responsible for ensuring that the changes are implemented.
Many building owners and landlords have hurried to update their homes and add facilities since the new Dubai rental index went live in an effort to make sure they can charge rates that are competitive with the local market average.
Because their current star rating was lower, landlords frequently had to cut their rents.
“The new requirement for Ejari allows to distinguish the rents of units that are refurbished and those that are not,” said Eima Hajimalan, Manager at GCP Properties.
A chance to level up
The requirement for landlords to include these additional facts has two main effects, according to industry insiders.
After being fully informed of what has been done, tenants are left to choose whether or not to sign a lease with the landlord at the advertised rates.
It presents an opportunity for landlords in older buildings to make improvements and increase the likelihood that their rental returns would increase.
“There have been lots of instances where the tenant has shown the star rating to justify why landlords should cut their rents,” said a leasing agent. “And landlords had to do so because if they went to the Rental Disputes Centre, they would have been told to lower rents.
“Modifications give them a chance to level up with market averages.”