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Short term leasing of apartments without licence illegal

By Parag Deulgaonkar

Individual apartment owners, offering their units on short-term lease such as on daily or weekly basis, should have a license and must incorporate a company to run such a commercial activity, a senior government official told Emirates 24|7.

Mohammed Shael, Chief Executive Officer, Business Registration and Licensing in Dubai’s Department of Economic Development (DED), said: “Short-term residential rentals is an economic activity. Any individual would like to be involved in this activity but he needs to seek a license to be able to offer such service. This business activity would require the individual to incorporate a company through Department of Tourism and Commerce Marketing,” Shael said.

A number of individuals, mainly those owning luxury apartments, have been using various media channels, offering their units on short-term lease at very discounted prices.

A case to point are adverts by some apartment owners in Burj Khalifa, the tallest tower in the world with one such online advert reading: “A two bedroom fully-furnished apartment in Burj Khalifa for Dh16,000 per week”.

Asked how the department plans to put an end to this “illegal” business activity, Shael said: “The commercial compliance and consumer protection division in DED will take measures to ensure the safety and rights of short-term tenants.

Adam Farani, Burj Khalifa specialist, says people, who bought serviced apartments in Armani Residence side of Burj Khalifa, do lease them on short-term basis with daily rents starting from Dh1,500 per night.

One-bedroom apartments in Armani were bought by these investors during the property boom days for Dh10 million, while two beds were purchased for Dh25 million, he adds.

However, he believes renting on short term in the residential wing of the tower poses a security risk.

"There are many people who rent their apartments in Burj Khalifa on long term basis. However, as far as I know, the rental contracts should not be less than a year, anything rented short term or less than a year is considered "inappropriate" and can be categorized as a security risk due to the nature of the building being the tallest in the world.”.

Emaar Properties, the developer of the tower, did not comment to questions sent by this website.

Asked about the impact on the local economy as tourists take up such low-cost options than staying in hotels or serviced apartments, Shael said: “DTCM enjoys good standards to regulate short-term rentals services, and as long as the business owner fulfills those standards, it becomes part of Dubai’s offering.”