Leasing your flat as holiday home?

Hundreds of individuals advertising their apartments online as holiday homes in Dubai must ensure you do apply for a license next year or you will be fined.

Dubai's Department of Tourism and Marketing (DTCM) will start accepting applications for holiday homes licenses before the end of the first half of 2014, a senior government official told Emirates 24|7.

“Following the issuance of the decree, DTCM is now working through the procedures that will govern the regulation of the market and is expecting to announce these procedures within the next three months,” Dr Ahmad Belhoul, Chief Executive Officer — Strategy and Tourism Sector Development, DTCM, said.

“There will be a consultation period to allow property owners and potential licensees the time to understand the requirements. Licenses will be applied for online in line with the current best practice of the government of Dubai.

“It is expected that applications for holiday homes licenses will be accepted before the end of the first half of 2014.”

Dubai government issued Decree No 41 of 2013, concerning the regulation of the holiday homes market in the emirate of Dubai. (Scroll down to read)

Asked about the number of individuals advertising holiday homes in Dubai, Belhoul said that prior to the issuing of the decree, there was no law governing the regulation of short-term holiday rentals and therefore there are no figures available with regards to the market.

The number of short-term (monthly and daily) listings on dubizzle.com, an online classified portal, stood at 899 and 323 respectively on Tuesday morning.

“… in comparison to other destinations around the world, the market is in its infancy,” he said, adding the decree stipulates that DTCM will now regulate the market and work to promote the market, offering increased options to visitors.

Two new categories will be added to the hotel classification framework with “holiday homes” being classified as either “standard” or “deluxe.”

In February 2012, Sanjay Manchanda, Nakheel Chief Executive Officer, highlighted the nuisance that short-term letting had created in Palm Shoreline Apartments, blaming these “temporary” renters for creating a ruckus when they were barred from using the common facilities such as the pool, the gym and the beach.

Subsequently, Emaar Properties, Dubai’s largest developer, which has build and manages Emirates Living community, issued a circular, banning residents and owners from renting villas on short term.

Though Belhoul did not reveal the maximum financial penalty that an individual could face for violations, he asserted: “Property owners who are gaining revenue by renting their properties as holiday homes and are unlicensed will be fined.”

- Sheikh Mohammed issues decree to regulate Dubai's holiday homes market

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, in his capacity as the Ruler of Dubai, has issued Decree No. 41 of 2013, concerning the regulation of the holiday homes market in the emirate of Dubai.

With the objective of contributing to the growth of the tourism industry by broadening the range of accommodations available to visitors, the decree dictates that Dubai's Department of Tourism and Commerce Marketing (DTCM) will be responsible for the granting of licenses to those parties who intend to rent out a furnished residential property on a daily, weekly or monthly basis, said the Government of Dubai Media Office said.

The decree dictates that DTCM will define the standards that must be met and procedures that must be followed to receive a license; accept license applications and approve or deny such applications; conduct inspections on the properties to ensure they meet the required standards; and create a database of all such licensed establishments in the emirate. Restrictions will be placed regarding in which areas of the emirate licenses will be granted and two new classification standards will be added to the existing hotel classification framework, with ‘holiday homes' being classified as either ‘standard' or ‘deluxe'.

Helal Saeed Almarri, Director-General of DTCM, said, "The regulation of the renting of properties as holiday homes will have a considerable positive impact on two of Dubai's key industries - tourism and real estate.

"With regards to tourism, in order to achieve the target of welcoming 20 million annual visitors to Dubai by 2020, one priority is the supply of visitor accommodation and broadening the range of accommodations available is a major part of this. We are working with the private sector to bring more five star hotels to the emirate and in September of this year, DTCM announced a financial incentive for the development of new three and four star hotels. Now, under the directive of Sheikh Mohammed, the licensing of properties as holiday homes will add further accommodation options.

By including holiday homes as part of our hotel classification framework, we will ensure that visitors can book a private apartment, townhouse or villa with full confidence that the accommodation is of a quality standard, has the appropriate insurances, and is managed by a qualified party.

With regards to real estate, this decree provides a potential revenue stream for owners of a second or multiple properties: an alternative to renting out the property on an annual lease. By being part of the wider hotel classification scheme, property owners will be able to benefit from the growth of visitor numbers over the coming years. Following the issuance of the Decree, DTCM will now commence preparations to activate the directives and establish the processes required.

The Hotel Classification Scheme was passed into law in May this year, with the objective of improving clarity and increasing the type and quality of hotel rooms and accommodation available across the emirate of Dubai and the services provided within the establishments. The scheme adopts a multi-layered framework to rate and categorise each hotel and hotel apartments establishment, with specifications on the requirements for different types and levels of guest accommodations.

- What is a holiday home?

Vacation property is a niche in the real estate market dealing with residences used for holiday vacations. In the United Kingdom this type of property is usually termed a holiday home, in Australia, a holiday house/home, or weekender, in New Zealand, a bach or crib. In the United States the most common designation is second home.

A second home or vacation home can be a home owner's asset as renting it could provide additional income. Many vacationers are opting for a single family residence that they can rent on a nightly or weekly basis. In many cases the savings for them are significant compared to hotels or vacation packages. For owners it can be as rewarding as paying the mortgage. As people begin to realize this trend vacation type properties are becoming popular not only for existing homes but also for building one. (Wikipedia)

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