The Indian expatriate community, NRIs, make up around 30% of the population of the United Arab Emirates, with a population of around 3.5 million as of 2021. This makes Indians the largest community in the UAE by ethnicity. As announced by India’s Minister of State for External Affairs, V Muraleedharan, in 2023, more than 130,000 Indians had moved to the UAE since the end of 2022.
The movement of Indians on this scale requires NRIs to take up housing in Dubai. Most of those who initially reach Dubai cannot afford to buy a house there immediately and look to rent a property for residential purposes. Luckily the process to rent a property in Dubai is quite straightforward and without complications. A few basic documents are needed to complete this relatively simple process.
What are the different types of rent agreements in Dubai?
There are two types of rent agreements in Dubai. They are as follows:
1. Residential Rent Agreement:
Residential rent agreements are used in cases where the property being leased out is to be used for residential purposes, or in other words, the lessee will be living in the property. Such rental agreements are made for properties such as apartments, villas and townhouses, and these are to be used for the personal use of the lessee.
2. Commercial Rent Agreement:
Commercial rent agreements are used in cases where the property being leased out is to be used for business purposes. The lessee will be using the property to fulfil business needs. Such commercial properties may include retail shops, warehouses, office spaces and other properties for commercial use.
What should you opt for when you first land in Dubai?
In order to rent a property in Dubai, the Emirates ID card is a compulsory document. It takes some time to apply for and get your Emirates ID card. Hence, when you arrive in Dubai, you may opt to stay in a holiday home or take a property for a short-term rental. Such short-term rental is on the basis of your valid passport and may be available to rent for various short-term periods – daily, weekly or monthly, normally upto a maximum period of 6 months. Such short-term rental properties come furnished and have basic utilities such as electricity, water, and internet facilities. Short-term rental contracts are monitored by the Dubai Tourism and Commerce Marketing (DTCM) authorities.
What documents do you need for a rent agreement?
Before we go on to read about the documents and other registrations required to execute an agreement for a rental property in Dubai, let us learn about the laws governing tenancy agreements in Dubai. All rental contracts in Dubai and the subsequent relationship between landlords and tenants are governed and face regulation by the Dubai Rental Law No. 26 of 2007 and the subsequent amendment – Law No. 33 of 2008. Rental contracts in Dubai are regulated by the Real Estate Regulatory Agency (RERA) tenancy laws. RERA uses the Ejari system, which makes it mandatory for all tenancy agreements in Dubai to be executed in a government-approved format and registered there to ensure that all rental contracts are properly registered and monitored. You should also know about Decree No. 43 of 2013, dealing with all matters relating to increasing property rent, and Decree No. 26 of 2013, which deals with rental disputes and settlements through arbitration or courts of law.
The following are required by NRIs to execute a rental agreement in Dubai:
1. Passport:
A valid passport is the most basic of documents. It is required for identification purposes and as a support to the documentation to be executed.
2. UAE Residence Visa:
In order to go for long-term rentals, for periods ranging from 1 to 2 years, as an NRI, you need a valid UAE residence visa. You may also enter into a rental agreement with a tourist visa, but normally, the duration of such agreements is limited to 6 months.
3. Emirates ID Card:
This is a document that is required for most of the significant matters in your day-to-day life. Entering into a long-term rental agreement is no exception.
4. Ejari Registration:
As a tenant, you need to be registered on the Ejari platform of RERA in Dubai. You need to submit your lease agreement for approval on this platform, thereby ensuring that your lease is one which is legally binding and you are entitled to your rights and protection by this platform.
5. Standard Rental Contract:
The official website of the Dubai Land Department has the standard rental agreement contract, which can be downloaded. This contract form comes in both English and Arabic and is fully editable in order to customise it by adding or amending any conditions the landlord or the tenant wishes to have included. The contract may also be downloaded from the Real Estate Self Transaction app, popularly referred to as the REST app, launched by the Dubai Land Department.
6. Lease Agreement:
Once you have confirmed the property you wish to lease, you need to finalise the lease agreement. Do ensure that you go through all the terms and conditions mentioned in the agreement thoroughly. It is also advised that you do a minute inspection of the property you are about to rent and tally the realities with what is on paper.
7. Security Deposit:
Landlords in Dubai will ask for a security deposit, as is the practice all over the world. The security deposit is usually 5% of the annual rent in case the property you are renting is unfurnished and may go upto 10% of the annual rent in case the property is furnished.
8. Tenancy Contract:
Ensure that your landlord gives you a written tenancy contract. Such a contract needs to mention all the terms and conditions of the lease agreement and should necessarily include the rent and the schedule of payment of such rent. Your tenancy contract should also include the responsibilities of both parties to the agreement – the landlord and the tenant.
9. Post-dated Cheques:
It is often a practice in Dubai for landlords to take post-dated cheques from you, the tenant, on account of the rent payment in advance. In such cases ensure that you have sufficient cheque leaves with you.
How can you search for houses to rent?
1. Real Estate Websites:
You may use real estate websites to check out houses based on the parameters you enter into the sites. Some popular websites are:
- Bayut
- Dubizzle
- Emaar
- Property finder
- DAMAC Properties
- JustProperty
- Zoom Property
- Better Homes
- Nakheel Properties
- Al Fattan
- Sobha Group, etc.
2. Real Estate Agents:
There are a number of real estate agents in Dubai who provide people looking to rent houses with a range of properties and a lot of alternatives as per your choice and requirements. Real estate agents could be individuals as well as companies.
3. Newspaper/Social Media Classifieds:
You may seek properties for rent posted by owners directly in newspaper and social media classifieds (e.g. Facebook groups), and contact the owners for further consideration.
How much would it cost to rent a house in Dubai?
There are certain upfront costs involved in rental agreements that you should be aware of:
1. Ejari Registration:
Registration in the Ejari system involves a cost that is part of the rental process. This cost differs if done online or through a Real Estate Service Trustees Centre. If done online, the charges are AED 155 (plus VAT), AED 10 for the Knowledge Fee and AED 10 for the Innovation Fee. If you get the registration done through a Real Estate Service Trustees Centre, the charges are AED 219.75 (plus VAT), AED 10 for Knowledge Fee and AED 10 for Innovation Fee.
2. Agency Fees:
The real estate agency that helped you to find the property will charge you a fee for their services. This ranges from 5 % of the annual rent to 1 month’s rent.
3. Housing Fee:
There is a housing fee levied by the Dubai Municipality, normally 5 % of the annual rent. This is usually borne by the tenant.
4. DEWA Fees:
Dubai Electricity and Water Authority (DEWA) charges you a fee for setting up the water and electricity connections at your leased premises.
5. Empower / Chiller Fees:
In case the property you have rented has a central cooling or district cooling service facility, you may be required to pay a charge for such facility separately.
Conclusion
While it is a straightforward process to enter into housing or rental contracts for NRIs in Dubai, there are a lot of details which you must pay attention to. There are certain obligations arising out of the contract and the local law that you need to be aware of. It is always a good idea to seek advice from a legal expert or a real estate expert to understand all this and to get updated information about the requirements currently applicable.
