Lease Renewal Process in Dubai: Landlords Rights

Given the cosmopolitan atmosphere, vibrant culture and relentless growth of Dubai, it has become a melting pot. People from all over the world come to Dubai to live, work and spend holidays. This influx of people has flourished the rental business in Dubai because most people visiting Dubai prefer residing in rental properties. 

If you are a tenant living in a rental property and your lease term is going to end, you may find yourself at a crossroads, thinking about the lease renewal process. It is better to renew your lease agreement than move to the next place. To complete this renewal process smoothly, you just need to adhere to Dubai tenancy contract renewal rules.

This guide explains the lease renewal process in Dubai and provides you with every detail that is required to renew the tenancy contract. If you are a tenant and want to know about the Dubai tenancy contract, get a Dubai real estate corporation lease renewal form, agency renewal fees, or a landlord who is interested to know how to ask the tenant to renew the lease, then this guide is for you.

What Is Lease Renewal In Dubai?

This concept refers to the process of increasing the lease agreement upon completion of the initial term. This process allows you to extend your stay in a rental property after terminating your initial lease agreement. Normally, the duration of a lease agreement in Dubai is one year. If you want to stay further in that property, you need to renew your lease agreement and make your extended stay formal.

Benefits Of Lease Renewal In Dubai:

The real estate market of Dubai is ever-evolving. New projects are being unfolded with each passing day. Considering this, you may find new and better rental properties quite easily. You may wonder why you should consider a lease renewal agreement in Dubai. Certainly, this metropolitan city offers a plethora of rental options to consider but lease renewal has its own advantages that cannot be negated in any case.

Familiarity

While living in a specific apartment or house, you become familiar with its living ambiance, neighborhood and social milieu. If you switch your living place, you will again have to adjust to a new environment and understand the dynamics of that specific area. Renewing your tenancy contract enables you to continue living in the same property and place you are familiar with. So, you do not need to experience unnecessary hassles in home searching and shifting.

Stable Rent

If you decide to stay in the same residence and renew your tenancy, you may also enjoy the advantage of a fixed rent rate for the next time. You may not have to face a rental increase in this specific case that is certain if you shift to another rental property. Lease renewal may prevent you from experiencing a potential rental increase.

Prevents From Expenses Required To Shift

Shifting residences comes with a number of problems, such as packing and moving. It requires your time, energy, and expenses to move to another place. Staying in the same residential unit keeps you from agency fees, security deposits and moving costs. 

An individual has to decide based on his specific needs, interests, and requirements. However, based on the above-mentioned factors, we cannot ignore the importance of the lease renewal process.

Here Is How To Renew Tenancy Contract in Dubai?

Normally, one has to start the lease renewal process two to three months earlier than the completion of the existing agreement. This approach gives both parties ample time to discuss or negotiate terms and conditions for the new lease agreement.

• First, a tenant needs to contact the landlord or property management company to inform them about his interest in renewing the tenancy agreement. One needs to express his interest in a lease renewal agreement prior to the expiry of the existing agreement.
• Renew your recent lease agreement, find and comprehend clauses that deal with the renewal process, such as notice period, expiry of the current agreement, terms and conditions that may apply, etc. Once you review your tenancy agreement, you can now discuss terms and conditions such as rental amount and payment schedule for the next agreement with your landlord or property management company. Lease renewal negotiation ensures that both parties are ready for a lease agreement.
• Once you both agree on the renewal terms and conditions, you can make a new draft for the next period. This draft must include all discussed or negotiated terms and conditions and involved processes such as rental payment and payment schedule.
• After drafting and signing the renewal agreement, you need to update your tenancy contract and get it registered with the Dubai Land Department (DLD). To formally extend the lease agreement, you need to register the updated contract with the DLD.
• The lease renewal process involves certain fees that are normally shared between both parties. Generally, the landlord and tenant have to pay the Ejari and agency fees. Also, consider tenancy contract renewal fees in Dubai when seeking a lease renewal agreement. You may check the DLD website and Dubai Rest app for tenancy contract renewal online and lease renewal fees.

Things To Consider When Seeking A Rental Property Or Renewing Your Lease Agreement:

Ejari Registration:

Ejari registration is imperative for all kinds of rental contracts in Dubai. All contracts must be registered with ejari. This registration gives legal status to these sorts of contracts. If you want to take property on rent to aim to renew your lease agreement to extend your stay, you need to get these contracts registered with this system to make those contracts valid.

Rent Caps: 

The Rera Estate Regulatory Authority (RERA) is responsible for defining annual rent increase limits in Dubai. The Rera rental increase calculator determines the limit for increases in rental payments. The calculator also determines the rental value and maximum increase limit of a specific property in Dubai, preventing conflicts between landlords and tenants related to rental value or increase limit.

Landlords Rights In Lease Renewal Agreement:

The Right To Refuse The Lease Renewal Agreement

Under specific conditions, the landlord has the right to refuse the lease renewal agreement. He has to provide a valid reason for refusal. Based on specific circumstances mentioned by the Dubai Land Department (DLD), the landlord has the right not to proceed with the lease renewal agreement. If the landlord intends to demolish his property for construction purposes, renovate his property, recover for personal use, or sell that property, then he can notify his tenant at least 90 days prior to the termination of the contract and refuse the lease renewal agreement.

The landlord has the right to go for an increase in rent based on the RERA rental increase range. He can increase the rental value of his property. However, it must not exceed the limit determined by the RERA calculator. Factors such as the type of property, number of rooms, and location of a particular property determine the annual rental increase for a specific property. If the rent is 10-20% lower than the estimated market, then the landlord has the right to increase rent by up to 5%.

Notably, the commercial lease renewal process is a bit different from that of residential units, mainly because of legal considerations, lease terms, and negotiation dynamics.

Summing Up:

Given Dubai’s booming property market, one can find a number of rental properties. However, extending a stay in a specific property or renewing a lease agreement has its own advantages. It keeps you in a familiar environment and prevents an increase in rent. This decision also makes you avoid unnecessary expenses involved in searching and moving. A tenant has to inform his landlord or property management company about his intentions for an extended stay. Both parties can work together to form a new agreement and then get it registered with the Ejari system to give it legal status.

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