Saturday, September 01, 2007

New freehold regulations likely

The freehold homeowners in Dubai will now have to seek prior approval of the Dubai Land Department before renting out their premises from next year, a government official announced.

As per the new regulation issued by the Land Department, homeowners who wish to lease out a property will first have to apply seeking permission from the Land Department.

Thereafter, they will have to get themselves officially registered in any rental contract which they draw up with a tenant. While doing so, the restrictions imposed by the Land Department pertaining to matters such as the term of lease, or the number of tenants per unit etc., should be taken into consideration.

The Land Department has stated that the said scheme will be applicable only to a landlord renting an entire unit, and is not intended to address the subletting of rooms within a unit which is already occupied by the landlord.

The recently formed RERA has stated that the Land Department is in the process of finalizing a three or five year tenancy contract to help tenants in dealing with the rising rentals. The agreement will be a model agreement that will protect the rights of the tenants. The RERA Chief Executive, Marwan Bin Galita, has mentioned that the main role of the organization is to authenticate rental agreements and act as an advisor on issues relating to rent cap.

The Director of development and marketing administration at the Land Department, Mohammad Sultan Thani, revealed "The idea is in its initial stage, and is not our priority at the moment. But we would like to bring in more regulation and transparency in the rental market to win the confidence of tenants."

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