Just a handful of landlords are trying to bypass Abu Dhabi’s rent control, a senior official said. Head of rent dispute committee Mohammed Rashid Al Hamily said some property owners were mercenaries who circumvented the law to increase rents.
They did this either by turning buildings into hotel apartments or clearing out tenants on the pretext of carrying out maintenance and then renting out the flats to others at higher rents. Al Hamily said 99 per cent of UAE national owners do not break the law to raise rents.
Just seven “rogue” investors and owners were behind the problem in Abu Dhabi’s rental market – but he declined to name them.
He urged to take steps to stop these owners – who he said were exploiting the demand for housing by nationals and expatriates – from illegally raising the rent.
Al Hamily said an authority was needed to monitor the real estate market and implement steps to stop the practice. He said: “We rejected all demands for the rise in rents above the cap. In some cases the increase in rent was 400 per cent. About 60 per cent of cases considered by our committee dealt with illegal rent increases.”
The Ministry of Economy said increase in rents was a major cause of the rise in inflation. Rent caps in Abu Dhabi and Dubai have apparently failed to curb the enthusiasm of some property owners.
Sources said Abu Dhabi’s seven per cent cap could be amended to reflect changes in the market.
Meanwhile, property owners have accused some real estate brokers in Abu Dhabi of making excessive profits. Mohammed Taher, a national who owns a five-storey building of 20 flats, said he earned Dh1.2 million a year from the property. But the flats were rented out for Dh1.7 million – with the difference being pocketed by a broker. Taher, who criticised the way some agents treated both owners and tenants, said: “A large part of the Abu Dhabi market was under the control of brokers.”
Mohammed Abdullah, Acting Director of Rents at Abu Dhabi’s Commercial Buildings Department, said: “Some brokers are abusing the draw system used to allocate flats when there are a large number of applicants.”
Names are drawn at random to decide who receives the keys – but agents sometimes cash in by sub-letting from whoever wins.
Abdullah said the department was taking legal action against those who violated the system. But he said the draw system remained the safest and fairest method.
Government sources said there were 400 registered property brokerage companies in the capital and the behaviour of some of them was causing concern.
Some intermediaries were responsible for a new problem where a tenant leaving a property mid-contract would demand extra cash from the incoming tenant to cover excessive brokerage fee of up to 20 per cent.
And other brokers charged people Dh100 simply to show a property, added the sources. Some of the middlemen earned Dh1,000 a day from this practice.
Real estate industry sources called for a proper method to prevent violations as the Rent Dispute Committee could not intervene until after an alleged offence had taken place.
is charged by most brokers from those who want to see the property, even if they do not take it.
is earned by brokers by just showing properties.