Hidden Costs in Renting an Apartment – UAE

There are many fees and charges, make sure you only pay what you need to.

Agency fees

According to the Real Estate Regulatory Agency (Rera) ethical guidelines, a property broker should only charge commission to the party they are representing, However, there are loopholes. Depending whether the property is managed or not, the landlord will also be charged for this service but normally the commission is payable by the tenant only.The typical agency commission is five per cent of the yearly rent, but there is no law that specifies a minimum or maximum amount of allowed fees.If you renew your lease through an agency or management company they may charge an administration fee, although not all of them do so. Your lease should stipulate the charge.Agency commissions are usually 2 to 5% of the first annual rent. That’s a standard. In any case, the renewal fee should be agreed by all parties beforehand.

Ejari fees

If the property is managed then the agent can register it at Ejari on behalf of the landlord. The responsibility for Ejari registration lies with the landlord, but the tenant can now also register the tenancy themselves. The cost is AED 195 in person or AED 160 online.The Ejari fee also has to be paid on renewal, usually by the tenant and it should not be more than Dh200.

Deposit

The deposit is usually paid with a post-dated cheque. The contract should have a clause saying in what time frame after vacating the property it should be returned to you.The standard is 5% for unfurnished properties; 10% for furnished ones. In some cases landlords may demand a deposit equivalent to one month’s rent. For furnished units the deposit is higher and would depend on the type of furniture and appliances. There are often arguments over whether the property was handed back in the same condition. This is why a checklist and, even better, photographs of the property are necessary. Also try and include a definition of normal wear and tear and responsibilities for maintenance. The tenant must ensure that the property is returned to the landlord in the same condition that it was rented. The landlord reserves the right to make deductions from the deposit in case of any damages to the property caused by the tenant.

DEWA DEPOSIT

Besides paying monthly (or otherwise agreed) utility fees, you have to pay DEWA deposits for renting a property. The deposit amounts are as follow:

Apartment

1000 AED (deposit – refund on leaving)

110 AED (connection, non refundable)

Villa

2000 AED (deposit – refund on leaving)

110 AED (connection, non refundable)

5 Bedroom Villa

2000 AED (deposit – refund on leaving)

210 AED (connection, non refundable)

Unexpected charges

Some landlords charge if your rent cheque bounces. Most tenancy agreements will stipulate some penalty charges if the tenant’s rental cheques gets returned by the bank for any reason. This could range anywhere from Dh250 to Dh1000. Tenants must refer to their tenancy agreement to know if they would be charged and what the charges would bei. Be aware it may not only apply when you have insufficient funds but also if your cheque is returned because your signature was what banks call ‘irregular’. Some contracts even state that if it happens more than once the landlord can evict you. There shouldn’t be anything else to contend with, but tenants should always read the terms and conditions of the tenancy agreement as there may be other fees and charges for which the tenant may be liable.