TENANTS DICTATE TERMS
dubai — Residential landlords in Dubai are no more as stringent on the number of rent cheques like earlier. Tenants have always cried foul over having to pay rent amounts in bulk in one or two cheques. However, with new supply coming to the market and rents declining marginally, four cheques is soon becoming the norm in the Dubai rental market.
“We are seeing the market shift to four cheques being the norm over one cheque and, as more supply hits the market, this trend will continue and we will most likely see the number of cheques increase to six or even 12 in the upcoming years,” says Sanjay Chimnani, managing director, Raine & Horne Dubai.
Although suburban communities are seeing more such incentives and attractive payment terms from landlords who are vying among each other to fill up units, there are the odd good deals in centrally located neighbourhoods as well.
“We are also seeing this trend in central locations such as The Springs and Dubai Marina. Since Q1, more than 50 per cent of the rental contracts negotiated in The Springs and more than 40 per cent in Dubai Marina were negotiated with four cheques,” observes Lynnette Abad, partner and
We will most likely see the number of cheques increase to six or even 12 in the coming years
Sanjay Chimnani, managing director, Raine & Horne Dubai
head of Property Monitor at Cavendish Maxwell.
As per Property Monitor’s database of rental contracts from agencies across Dubai, 40 per cent of rental contracts agreed in July 2017 were with one cheque whereas 43 per cent were agreed with four cheques. In July 2016, 66 per cent of agreed rental contracts were with one cheque and only four per cent were with four cheques.
“The top five areas where we are seeing four cheques are Remraam, Damac Hills [formally Akoya], Mudon, Jumeirah Village Circle and Dubai Sports City. We have seen this trend across all areas in Dubai, especially in suburban areas where new supply has been released. This trend started to gain traction in Q1 of 2017,” adds Abad.
Communities such as Sports City and Silicon Oasis are seeing landlords accepting multiple cheques. “In areas such as Downtown, landlords are still insisting on payments in one or two cheques,” reckons Mario Volpi, chief sales officer, Kensington Exclusive Properties.
This trend is more prevalent for apartments as villa landlords are still sticking more rigidly to one or two cheque payments.
“Larger units in luxury developments and new developments have to be more flexible on rents and cheques. Affordable housing is still holding strong in most well-settled communities,” adds Chimnani.
However, for those of you hoping to pay rent in 12 cheques, you may have to wait a bit longer. This trend was discernible in 2009
The top five areas where we are seeing four cheques are remraam, damac Hills, mudon, JVC and sports City
Lynnette Abad, partner and head of Property Monitor at Cavendish Maxwell
In areas such as downtown, landlords are still insisting on payments in one or two cheques
Mario Volpi, chief sales officer, Kensington Exclusive Properties
when the Dubai property market went through a lean patch.
“With the few exceptional cases, 12 cheques are definitely not the norm yet and we see this only from very motivated landlords. When a tenant is requesting this amount of cheque payments, the landlord’s response is generally not one of approval as this is seen as too radical with a fear that tenants might abuse the system and break payments in the future,” says Volpi.
According to Property Monitor, you can currently rent a townhouse in Layan community and even some apartments in Dubai Marina with 12 cheques.
“If a landlord is good going with 12 payments, he would prefer to go the holiday home route, wherein he gets the upside of the annual amount earned from the property, better maintenance of the unit and flexibility to part use and sell the unit,” adds Chimnani.
It’s mostly individual landlords who offer these incentives. Company-owned landlords are harder to negotiate with and still insist on one or two cheque payments.
“We have seen private landlords offer free months and upgrade the property as per the tenant’s request. For corporate landlords, we are seeing them offer free months, waive fees, include air conditioning and sometimes even offer 12 cheques,” Abad points out.
Tenants with a good track record can use it as a leverage to get a rent reduction, rent-free months or rent spread across more cheques.
“Incumbent tenants too can try to negotiate better terms. Providing they give 90 days’ notice prior to expiration of their agreement, they should be able to alter their contract as landlords prefer stability than face the prospect of an empty unit should the tenant decide to leave,” says Volpi.
So, how do you get a good rental deal? Standing firm with your negotiation is key and work on a couple of options. “If the tenant is either a young married couple with no children and/or pets or perhaps a small family, they are more likely to get better terms. Individuals looking to share will not be offered better payment terms. If couples or small families offer to pay the rental asking price, they achieve favourable payment terms,” suggests Volpi.