The tenant may incur several costs like service fees and Real Estate Regulatory Agency (RERA) fees at the time of renewal of the tenancy contract in Dubai. Such charges are almost general during the rental process, and most tenants ask whether such charges are legal or acceptable. Comprehending the laws governing the terms of tenancy contracts and when a landlord can charge a tenant may be the only way to understand Dubai’s rental market.
In this article, we will discuss whether a landlord has the right to ask for service charges and RERA fees during lease renewal and under what circumstances a tenant would be eligible to submit their case for settlement to Dubai’s Rental Dispute Centre.
Tenancy Contracts: Defining Rights and Obligations
A tenancy contract is a legal agreement between a landlord and a tenant in Dubai. It states the rights and obligations of a landlord towards a tenant and vice versa regarding the rent or the property. The agreement not only consists of the amount one needs to pay to rent a place but also detailed information on additional charges that the tenant will be liable to pay during the period of tenancy.
Tenants should pay much attention to such terms since they usually stipulate whether certain charges, like service charges or government taxes, should be paid by the tenant.
Legal Basis for Charging Service Fees and RERA Fees
The legality of charging tenants service fees or RERA fees is based on the rental laws of Dubai, more particularly Law No. (26) of 2007, which governs the relationship between landlords and tenants in the Emirate of Dubai.
Article 22 of this law says that unless otherwise agreed upon in the tenancy contract, fees and taxes owing to government agencies are to be paid by the tenant. This means that unless the tenancy contract specifically states that a landlord is supposed to pay these fees, usually, you as a tenant are obligated to pay those fees.
RERA Fees: A Mandatory Charge
Charges related to RERA registration are mandated by the government and thus cannot be bargained. The charge is applied by the DLD, and it must be paid to have a tenancy contract registered. Every time the lease is renewed, RERA has to re-register the property, which leads to the RERA fee. It should be borne by the tenant unless agreed otherwise in a tenancy agreement.
It is worth mentioning that RERA fees are not arbitrary charges set by landlords but are part of the legal framework issued to regulate tenancy agreements in Dubai.
Service Fees: When Are They Legal?
Service fees, however, are charges that appear in your lease renewal fees only if it was a precondition to your tenancy contract. The services included are usually understood as property maintenance and other amenities. These can include services like security and cleaning as well as general upkeep of common areas. Again, these should be spelt out in the rental agreement.
In the event that your tenancy contract clearly states that you are obligated to pay service fees, your landlord has the full right to charge you those service charges every time you renew the tenancy agreement. Absent this, such charges cannot be levied by a landlord on you.
Can Landlords Increase Service Fees?
At times, tenants are concerned that the landlords may increase service fees with each lease renewal. Of course, there is no particular service charge that a landlord cannot charge, but the increase must be reasonable and justifiable. The landlord must not take advantage of the tenants by charging amounts that are unduly high or arbitrarily increased.
If you feel that this service fee hike is unjustly charged or overcharged, you can negotiate with your landlord or even get a legal opinion from an attorney.
When Should Tenants Approach the Rental Dispute Centre?
If a tenant and landlord cannot agree amicably concerning service or RERA fees, the tenant may take the dispute to the arbitration of the Dubai Rental Dispute Centre (RDC). RDC was established to resolve rental disputes efficiently and transparently, hence achieving fair solutions for landlords and tenants.
Some of the common situations where a tenant has to resort to the RDC include:
- Dispute over service charges: Upon being charged service charges that were not outlined in the tenancy contract and having failed to negotiate over the same, you can report to the RDC. The RDC then goes through your contract terms and checks whether the charges are lawfully chargeable or not.
- Issue regarding RERA fees: In case of miscommunication or disagreement regarding payment of RERA fees, the RDC can step into the dispute. However, as discussed above, in normal situations, tenants will have to pay the government-imposed charges unless the contract states otherwise.
- Unreasonable charge rises: Whenever a landlord raises service charges excessively without sound justification, the tenant can appeal to the RDC and question such rises.
- Failure to observe provisions in the tenancy agreement: Whenever a landlord initiates changes and new fees not initially agreed upon, tenants can resort to the RDC for arbitration to reverse such changes.
How to File a Complaint with the RDC
Filing a complaint with the Rental Dispute Centre is relatively straightforward. The tenant will collect the documents needed, which may include the tenancy contract, receipts of the charges that are in dispute, and any correspondence with the landlord.
The complainant tenant can file an online complaint through the official portal of the RDC or even personally visit the RDC offices to get their case filed. After filing the complaint, the RDC will schedule a hearing before the concerned authority, in which both parties can present their case.
The RDC will then proceed to make its decision according to the given evidence and applicable law, ensuring that both the landlord and the tenant consider the terms agreed upon between the two parties.
Conclusion
A tenant in Dubai needs to know all the details of their tenancy agreement, particularly about charges over and above service fees and RERA fees. Generally, under Dubai’s Tenancy Law, tenants have to pay these charges except where a contract states otherwise.
You have the right to negotiate or even take this issue before the Dubai Rental Dispute Centre if you feel that your landlord is levying fees that are unjustifiable or commercially unreasonable and fall outside of the contract. Knowing your rights and obligations under the law will help you avoid common misunderstandings and thus guarantee a smooth tenancy experience.
How HHS Lawyers Can Assist
Tenancy laws are very complex; disputes arising out of these laws can also be quite difficult. HHS Lawyers will guide you on your rights and ensure that your tenancy agreement has been conducted correctly. We offer professional advice and support in negotiating lease terms as well as filing a case with the Rental Dispute Centre. Contact HHS Lawyers today for the protection of your interests as a tenant in Dubai.
