The Addendum Trap: The Hidden Clauses in Dubai Tenancy Contracts That Force You to Pay Agent Fees

Dubai landlords charge administration fees of AED 1000 to AED 1500 for all the hundreds of thousands of tenants in the city, who are expecting an unexpected bill each year to renew their lease. Many people believe such charges are a requirement but it is not the case with Dubai’s rental regulations. 

Whether or not a real estate agent can charge renewal fees automatically depends on the situation; normally fee charging is limited to cases where there is a definite contractual agreement.

Not reading your tenancy contract, particularly the addendum, could prove to be costly. You might end up paying fees you don’t need, and you’ll also be sure to renew your lease with confidence.

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Can Agent Renewal Fees be Legal?

According to the agreement agreed to by Dubai Land Department (DLD) and Real Estate Regulatory Agency, real estate agents get paid once they present a prospective tenant to a home and manage the first lease transaction.

There is typically no automatic legal basis for an extra agent commission if a tenancy is being renewed on the same agreement without a move or any other negotiation of a completely new agreement. The Rental Disputes Center (RDC) has consistently said that administrative charges cannot be tacked on with no agreement.

The only compulsory renewal payment is the official payment of Ejari Registration with the Government, through approved government organisations.

Why Does the Contract Addendum Matters?

The major exemption comes in an addendum to your tenancy agreement.

When tenants sign a lease, they usually do not pay attention to a few pages.When signing, tenants tend to overlook a few pages of information from their original lease. Some agencies, however, have provisions in their agreement where the tenant will agree to a fixed amount of money for the renewal or administration of the accommodation at the time the tenancy is renewed.

Since this clause is usually present and both parties have signed the agreement, under Dubai contract law, they generally deem it legally binding, as it entails the consent of landlord, tenant and the agency.

What Should You Check Before Renewing?

Take time to make sure that you read through any renewal invoices thoroughly before paying them.

Pay particular attention to any wording that refers to annual administration fees, administrative commissions, processing fees, or agency fees. If the clause doesn’t exist in the signed agreement, you may have some doubts about why the money was requested.

It will help if there is a dispute later in the game, if you retain a copy of your original contract and addendum.

How to Avoid Unnecessary Renewal Fees?

Renewal fee clauses are not always in contracts, and, as a result, it is sometimes possible to deal directly with your landlord.

There are numerous landlords who take no objection to reletters without asking for the original broker’s involvement. The Dubai REST App will process the renewable tenancy by completing renewal online, once all parties sign the renewal agreement.

In this way tenants can save themselves from unfavourable administrative mark-ups, and still adhere to the Dubai rental policy.

What If the Agent Refuses to Process Your Renewal?

There are certain instances when tenants run into problems with an agency where rent cheques aren’t accepted or for the agency to release renewal papers until they have paid additional fees.

If applicable, tenants can go through the Rental Disputes Center where they can submit an “Offer and Deposit” case. When the lease agreement session does not go smoothly, this legal procedure can be used to deposit the rents to the RDC while maintaining the tenants’ tenancy rights.

It’s advisable to obtain legal consultation before starting formal legal proceedings.

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