Dubai landlady refuses to return Dh129,000 security cheque despite rent already paid

Mario Volpi advises a Dubai tenant whose landlord has kept a cheque after the rent was paid in full. Sarah Dea / The National Mario Volpi April 8, 2015 Updated: April 8, 2015 02:27 PM       Related Dubai landlord disappears with deposit - what can tenant do? Dubai landlord disappears with deposit - what can tenant do? Where Dubai rents have risen and fallen, Q4 2014 — in pictures Dubai landlord refuses to pay tenant’s Dh8,000 water bill after leak Buy in Dubai? Property prices to soften but don’t wait too long Dubai resident left bemused by property agent’s demands Topics: Rera, Rent, Homefront I live in JLT and my landlady asked me to provide a security cheque for the total rental value of Dh129,000. She also told me she will return the cheque once the annual rent, paid by my company, had transacted into her account by the deadline. This clause is written in our contract agreement in the same words. The company paid the complete annual rent one week before the desired date but when I went to collect the cheque from her, she said she is keeping it as security for Dewa bills. She already has Dh10,000 as a security deposit from me, so is she allowed to keep the rental security cheque for another purpose? What action should I take? I am so puzzled by this strange behaviour? AS, Dubai The security deposit is held by the landlord in the case of any remedial works that need to be carried out due to the fault of the tenant or indeed any short falls in invoices/bills incurred by the tenant such as Dewa etc. What your landlady is doing by not returning your rental cheque is not allowed and I suggest you inform her of this. If she insists on not returning your rent cheque then your options are fairly limited. This case is intriguing as technically the landlady has not committed any crime (yet) as she has not cashed your cheque or indeed stolen it, as you gave it to her in the first place, so at this point you cannot go to the police to open a case. What I do suggest is you speak to Rera/rent committee and see if they can help in perhaps sending a notification to her to return your cheque. I am sure that they will suggest you file a case before taking it further. Ultimately she has to return the cheque to you as she is holding it under false pretences. I am looking to invest in Dubai and have two offers from two developers. However, I am confused as to which is the best. The first is a 575 square foot studio in Elite 10 sports residence for Dh508,000 with a completion date of June 2017. The second is a 565 sq ft studio in Eden Garden for Dh435,000 with a completion date of June 2016. Which one should I choose, and do you think Elite 10 deserves the higher price? IM, Dubai Obviously which project to go for is a personal choice and one that only you can readily make. I am happy however to give my opinion and recommendation. The construction company that is building Eden Garden has completed other projects, namely the Meridian Hotel, and is currently finishing the Sports City project along with one other in International city. The developers of the Elite 10, however, have a greater history of completed towers specifically in Sports city and therefore are well placed to deliver this. Now speaking about preferences, I believe that although the Elite is a little more expensive than the Eden Garden, I would suggest that due to the good build design, quality and popularity of their towers, I would pay a little more and choose the Elite. I stress that this is my pure preference and only based on past developer performance in terms of the number of completed projects and knowledge of the market. I am currently negotiating with my Abu Dhabi tenant for his second year and he was asking how much of a penalty he has to pay if he leaves the contract early. As far as I am aware Abu Dhabi law says that he is liable for the full amount and so it would be at my discretion as to if and how much of the rent is returned. Is that right? MA, Abu Dhabi The tenant can only terminate the lease early in one of two ways: firstly if there is a termination clause in the contract or with the agreement of the landlord, otherwise the tenant will not be able to terminate the lease and will be liable for the rent until the lease ends. Many landlords, however, will allow tenants to terminate early (for a penalty fee), if the tenant finds someone to replace them. You therefore have the right to decide as to how to play this as your understanding is correct. Mario Volpi is the managing director of Ocean View Real Estate and has worked in the industry in the emirate and in London for the past 30 years. Send any questions to mario@oceanviewdubai.com The advice provided in our columns does not constitute legal advice and is provided for information only. Readers are encouraged to seek appropriate independent legal advice

UAE should be concerned about property flipping, says Emaar chairman

Flipping - where speculators buy unfinished properties and sell them on to third-parties within a short time - was in part blamed for the extent of the housing market crisis in 2008 Adam Bouyamourn April 26, 2014 Updated: April 26, 2014 18:45:00 Save this article The Emaar chairman, Mohammed Alabbar, has warned about off-plan sales as the Government and other developers take steps to reduce speculation on property prices. Related ■ Aldar introduces strict resale restrictions as it reveals new Abu Dhabi housing projects ■ Dubai is ready for a ‘smarter’ boom this time around ■ Emaar to launch new phase of Mira Oasis townhouses in Dubai Emaar Properties unit listing proposal will take precision planning In pictures: Emaar’s major developments in the UAE Topic Emaar, “We need to learn from the mistakes of the past,” Mr Alabbar said at Emaar’s annual general meeting last week in Dubai. “We need to be concerned about flipping.” Flipping was in part blamed for the extent of the housing market crisis in 2008 – when speculators bought unfinished properties and sold them on to third parties within a short time, inflating property prices. Mr Alabbar’s comments followed news that the Abu Dhabi-based Aldar has introduced resale restrictions on new properties, designed to curb speculative flipping. Buyers must now pay 50 per cent of the property’s value before they can sell it on. The Central Bank has introduced caps on the amount individuals may borrow to finance the purchase of houses for the first time in the country’s history. Home loans have been capped at between 60 per cent and 80 per cent of a property’s value, while loans on unfinished properties have been capped at 50 per cent. Property experts warned against generous payment plans that allow buyers to defer paying the bulk of the cost of a new home until years after completion, in some cases. “Can you stop it? No.” Mr Alabbar said about flipping. “We try to minimise it.” abouyamourn@thenational.ae Read more: http://www.thenational.ae/business/industry-insights/property/uae-should-be-concerned-about-property-flipping-says-emaar-chairman#ixzz3054y9B8z Follow us: @TheNationalUAE on Twitter | thenational.ae on Facebook === No win situation for Abu Dhabi tenant given 105% rent hike Property expert Mario Volpi explains what can and can't be done with rental laws differing in the capital to those in Dubai. Mario Volpi April 30, 2014 Updated: April 30, 2014 13:53:00 Save this article Related In pictures: Where Abu Dhabi rents have risen and fallen, Q1 2014 In pictures: Where Dubai rents have risen and fallen, Q1 2014 ■ Abu Dhabi rent increase rules differ from those in Dubai ■ New legal centre to settle rent disputes in Dubai More frequent rent cheques would cut fraud Topic Rent, The Life, Homefront, I have lived in an Abu Dhabi building since 2007. Every year we have had a rental increase of 5 per cent at the renewal of the lease agreement. Currently the rent is Dh25,806. The lease agreement is expiring on August 23. Now I have received a notification informing me that the new rent will be Dh53,000 – which is a 105 per cent hike. I understand that this increase is due to the 5 per cent yearly increase cap being taken away but I would like to know, as per the law in the UAE, if there is any limit on the increase a landlord can demand. TT, Abu Dhabi Before the abolition of the rental cap, the emirate of Abu Dhabi had strict laws limiting the amount a landlord could raise the rent annually and this was maximum 5 per cent of the annual rent. Your landlord is entitled to raise the rent for this year as he sees fit. There is no limit of increase imposed on landlords any more. The Government has allowed this to help landlords achieve market rent, especially for those investors who historically were receiving very low rents. It appears that your landlord does not care whether you will stay or decide to vacate the property because of the outrageous increase. This being the case, I suppose that the landlord is maximising his position and if he gets away with it, he will be happy as he will be getting a substantial amount more for his rent. If you do leave, I guess that another tenant may be found relatively quickly. Either way you will end up being on the losing side. I would like to buy a property in Dubai with finance and I have some questions: 1. Does the buyer need to issue the security cheque (10 per cent of property price) prior to seeing the Memorandum Of Understanding (MoU) from seller? Or should that be at the same time for the buyer’s safety? 2. Whose name should be the receiver name in the cheque? Should it be the seller or the property agent? I was told by the agent that I should write the cheque with the name of their company. Is it appropriate procedure in Dubai? Frankly I don’t feel safe to put the agent’s name rather than the seller. How can I protect myself from he possible misuse of the cheque by the agent or seller? 3. Regarding the MoU, is there any liability for the seller if he/she turns down the deal after receiving my cheque? Can I put that in place? 4. How do I know whether the agent company is licensed as well as the agent? AL, Dubai Good practise for a buyer would be to produce the 10 per cent cheque before an MoU is signed, but it is normally handed over on the signing of the agreement. Under Rera rules the 10 per cent deposit should be in the name of the seller only. The agent should be holding this cheque as custodian only and it is normally handed back to the buyer on the day of transfer to be replaced by a manager’s cheque for the equivalent amount or full sale amount. The sale price can be confirmed only when all parties have signed and the buyer has lodged the deposit with the agent. If you have signed and paid the deposit to the agent but the seller did not sign then subsequently changed his mind, the deal would be null and void and you would get your deposit back. All companies and their agents should be Rera-registered. You can check this by visiting the land department website www.dubailand.gov.ae Always ask to see the company’s trade licence too to check that it is fully compliant and legitimate. Mario Volpi is the managing director of Prestige Real Estate in Dubai (prestigedubai.com). He has 30 years of property industry experience in the emirate and London. Send any questions to mario@prestigedubai.com The advice provided in our columns does not constitute legal advice and is provided for information only. Readers are encouraged to seek appropriate independent legal advice Read more: http://www.thenational.ae/business/industry-insights/the-life/no-win-situation-for-abu-dhabi-tenant-given-105-rent-hike#ixzz30Mk0BpzZ Follow us: @TheNationalUAE on Twitter | thenational.ae on Facebook ====