Tenants guide to renewing leasing contracts

Tenants guide to renewing leasing contracts

Renewing a leasing contract can be stressful, especially if you want to get a better, brighter, and bigger apartment with the same price you are currently paying. Even if you are committed to renewing your contract with the same Landlord, some tempting offers can make you a bit hesitant.

Read our guide to know all your options before committing to yet another tenancy contract.

Making the right decision

Are you happy in this space, or would you like a new addition, perhaps more space for a home office or a better view for your morning coffee?

Our suggestion is to scan through an abundance of choices online before you commit to renewing your existing lease. You could find a bigger space for the same price, or even if you are looking at reducing your costs this year, it’s best to check what’s out there.

Keep in mind other costs associated with finding a new home, such as agency fees, DEWA set-up, moving costs, chiller fees, etc... Factoring everything in, you and your family can assess your options from an economic and lifestyle standpoint.

If you choose to renew your existing lease, keep in mind that Retention is key for Landlords. It’s more efficient to keep a tenant than to re-market the property and wait until it is leased again – nobody wants to miss out on rental income!

Is the property worth what you are paying?

Are you getting your money’s worth in today’s affordable market? New homes are coming up every day in Dubai, and there’s no shortage of options!

Negotiating 101:

  • Dubai has rent caps that you should be aware of. To find out average rents in Dubai or to be informed about any possible rent increases coming your way, you should refer to the RERA (Real Estate Regulatory Agency), part of Dubai’s Land Department, rental index calculator[MK1]  (available on the Dubai REST application).
  • Compare with the current market prices. Find out how much a similar unit is available to rent for in your building or community, and try to price your unit around the same, considering the view, maintenance, and any other unique amenities that could affect the price of the home.
  • You aren’t just negotiating the rent amount. If you aren’t comfortable with your payment plan, you can suggest more payments. All terms in your tenancy contract are fair game for you to negotiate on.
  • Create a win-win scenario. If your Landlord feels like they are getting a good deal, too, they will be more likely to agree to your proposed rent amount.

Urban tip: We recommend having a 3rd party negotiate on your behalf; if you end up staying, you will want to keep a good relationship with your Landlord. Urban’s experts can help lay out your options for you.

More tips on negotiating: “How to negotiate your rent in Dubai.”

Everything you need to know about the notice period

Landlords should give a notice 90 days prior if they would like to increase the rent. If no notice is given, the tenancy contract is automatically renewed at the same annual rent amount with the same terms.

Urban tip: If your Landlord tries to increase your rent beyond the legal limits, you can file a complaint with the Rental Dispute Settlement Centre.

Your Landlord can refuse to renew a contract but must give 12 months’ notice to do so; this is an eviction notice and can only be done under certain circumstances.

To avoid a penalty charge, you should be requesting to terminate the contract 90 days before the end of your tenancy contract, unless otherwise stated in your tenancy contract.

We recommend starting this conversation  90 days earlier. Give yourself time to negotiate. If you don’t agree on the rent price, you’ll have time to share a termination notice, explore your options, and look for another home.

Lease renewal process for a property in Dubai

Before you proceed, note that tenants are responsible for the following charges when renewing your tenancy contract.

  • AED 175 – registering with RERA
  • AED 20 – knowledge and innovation fees
  • AED 1,000 – (average) admin fee payable to an agent
  • 5% of your annual rent – housing fees payable to Dubai Municipality

Urban tip: Renewing with Urban will cost you AED 750, and everything is done online!

Once you and your Landlord agree on a rental price and the terms of the contract, here’s what happens:

  • You will need to have a whole new tenancy contract and Ejari; this needs to be filled and signed by both parties
  • Collect passport and Emirates ID copies for the Landlord and tenant
  • Register your tenancy contract with RERA.
  • Give your Landlord the rent cheque(s)

Urban tip: You can now register your renewed lease with smart Ejari; the process takes up to 15 minutes!

Urban tip: Processing your renewal with Urban gives you the ability to pay your rent any way you like (credit/debit card/bank transfer/cheque), and there are always great offers for you!

Negotiating the rent and contract terms, collecting documents, disbursing the cheques takes up most of your time and energy. The process of registering takes 15 minutes only if everything is in order.

Ready to find out your options or renew your lease? We can help you decide and negotiate. Renew with Urban today.