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'New' Property Laws in Dubai??

Discussion in 'Dubai property' started by pcoghlan, Jun 15, 2008.

  1. pcoghlan

    pcoghlan Guest


    I purchased a studio in the Morocco area of International City about 18 months ago and have a tenant in at the present. I am looking to invest in some property here in US and so went back to my agent (key2dubai) to get them to list the Dubai studio for sale.

    The lease expires in mid July so I thought it would allow me to sell with/without a tenant, i.e. which ever the new owner preferred.

    The agent informed me that there is a new property law that means the tenant has the RIGHT to renew the lease the first year and I have no control over it. I am now also being told it is more difficult to sell a studio with a tenant, not ideal. The tenant is no trouble at all and I am happy with her but I do want to sell the studio. The tenant has indeed indicated she wishes to renew.

    Can anyone advise me as to whether the new law does in fact exist as I cannot find anything.

    On a second note I also decided that IF I need to retain the studio/tenant I would at least apply a minimal rent increase of 2-3% but again was told that I am now allowed to increase the rent in the first year by ANY amount. Does this also sound right?

    If these are indeed accurate I don't have a problem but I have been unable to find clarification online. What I have found indicates an increase up to 5% is allowed.

    Thanks for any input you can provide,
  2. oregon woodsmoke

    oregon woodsmoke New Member

    I don't know why it would be difficult to sell an apartment with a good tenant in place. Many investors are interested in rentals that are already producing an income.

    The only reason it is easier to sell without a tenant, is that you can get the place all cleaned up spotless and it will stay tha way, and the agents can show it without giving notice.

    You will miss out on buyers who intend to move in and occupy the unit themselves, but be realistic. How many people do you think are out there wanting to buy a studio for their own full time occupation? Not many; so you are not missing out on too many potential buyers.
  3. Wannaberich

    Wannaberich New Member

    I've just been making the same enquiries and my letting agent also said that the tenant can renew the lease after the 1st year.Also,you cannot put the rent up till end of the second year.
    You may find that you will find a investor who is happy to buy your studio with a tenant.
    You could always contact your tenant and ask her politely if she could move out.Maybe even offer her a small financial incentive like 2/3 months rent back.
  4. anil

    anil New Member

    Have a look through this:-

    I can see the stuff about rental increases not being possible if the contract was created in 2007.

    I can't find anything about the automatic renewal rights for the 2nd year.

    Anyway, it is probably in there.

    I bet any new rentals available now are very expensive as you have to account for an effective 2 year lease without rent rise.
  5. SAH

    SAH New Member

    put pressure on ur agent that you want to sell also offer them comission their money that they will charge tenant after 1 year i hope now u understand the situation i also want tenant out from apartment i heard the same story but i told my agent the same so he looks agree either rent increase or tenant out
  6. pcoghlan

    pcoghlan Guest

    Thanks but I don't believe putting pressure on my agent is the solution IF there are laws to be followed. I think it would be illegal to force a tenant out and I prefer to stay the right side of the law.

    I do now have several people contacting me through this website that are apparently interested in buying with the tenant in place so hopefully the issue is a non-issue now.

  7. SAH

    SAH New Member

    If 1 year completed with the tenant and as an owner you don't want to renew
    next year contract I still unclear about the law but i think there is a possibility for next year

    but thats good if you can sell with tenant

    good luck :)
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