Controversial Ejari Tenancy Renewal Clause by Realtors in Dubai

In Dubai, things are much different than in the UK, US, or Canada when it comes to Tenancy or Lease Agreements. There are not standard procedures set by the Government or Dubai Land Department.

It came in the local newspaper, that some real estate agencies in Dubai are starting to add a clause in the Ejari or Tenancy renewal contract which includes a 5% yearly renewal fee of the total rent amount to be paid by the tenant. So if you are paying AED 160,000. You need to pay AED 8000 as a yearly fee to the agency. Which is not only unfair but is a new way of grabbing money from under-pressed tenants. If it is a brand new contract, and the agent works on the viewings and is a point of contact between the landlord and clients, yes they are allowed to charge 5% of the total rental amount. 

You see, right now, the rents are high. Supply is less, and demand is high, so once the tenant finds something they like, they have to be fast and accept the demand from the landlord, which makes sense as he or she is the owner. However, it does not make any sense for the real estate agency to take advantage of the tenant. Adding this 5% clause to the renewal is completely absurd. 

The standard charge when it comes to the renewal of the Tenancy Agreement is between AED 500 to AED 1000. If the agency decides to charge more than AED 1000. You should challenge them to reduce the amount. Renewing a tenancy in Dubai is fairly easy. Everything is done through the REST App. Once the tenancy is ready, the agency needs to go to the tenant to have them sign the rental contract and collect the cheques. After that, they visit the landlord and have the landlord sign the contract, give them the cheques, and take a receiving proof of the cheques. 

After this, the agency delivers the signed contract and the cheque receiving proof to the tenant. So a charge of AED 500 to AED 1000 seems fair. Anything more than this is just being greedy.

So if you are a tenant in Dubai. Don't come under pressure. And challenge the renewal clause amount if it is more than AED 1000. All the best!