Decline in rental dispute cases

Decline in rentals ranging between 20 per cent and 30 per cent led to a decline in rental disputes, according to a top official of the rental dispute settlement committee.

Saeed Al Kindi, Chairman, Dubai Rental Dispute Settlement Committee, said decline in rents has also seen a drop of application for rent increases, which in accordance with Law 1 of 2008 has been fixed according to market situation and condition of the property.

Al Kindi told Emirates24|7 that the region will witness large architectural and commercial activitis. What is required is more efforts and professionalism as well as excellence and not to increase rents and not to be greedy.

The drop in rents of old buildings in the emirate is because people are increasingly shifting to newer ones, he added.

Al Kindi said old buildings on the outskirts of the city of Dubai are seeing a decline in rents.

While modern houses with comprehensive services and facilities such parks, health clubs and recreational areas did not see a decline in leasing demand.

He attributed the decline in rents of old houses to increase in supply relative to demand. Al Kindi mentioned most of these buildings lack modern infrastructural facilities such as health clubs, underground parking, entertainment units, dedicated security, etc.

Currently, as there is no dearth of new buildings with modern facilities, demand for the same is also on the rise, which means people are moving from old buildings to newer ones causing the rents to drop in the former, said Al Kindi.

On the other hand Al Kindi ruled out further decline in rental values in the next two years.

He said: "The real estate market does not work alone, but is affected to other markets such as stocks, trade, import and export, prices of construction materials, etc."

“Similarly, landlords should not increase rental values, and determine rents appropriate to market conditions without exaggerated loss or increase, and the fact that this impacts negatively on the various economic life, he said.

There are about 1,600 disputes before the committee at present. On an average, it receives about 100 cases a week, he said. And 30 per cent of these disputes are concluded by mutual consent.

Within one of the dispute case filed, the declaration of liabilities must be filed. In the absense of such a move, the committee will announce.

According to Al Kindi, the committee bases its provisions first to the lease, which is the law of contract, and also based on the laws is the law No. (1) of 2008, which stipulates the need for the contract includes the rental value, and in case the rent value was not specific the committee will fix such value similar to those applied in the market with known rents.

The law confined the requirements of amendment of the lease for the parties to the contract (increase or decrease), and in case the two parties do not agree, the committee adopts a fair rental value taking into account the above considerations.

But that should be under conditions where any of the two parties who want amendment notifying the other party within 90 days before the expiration of the contract.

He revealed the litigation fees shall not exceed 20 per cent of the rent, which ranges from Dh500 to Dh15,000.
 

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