When looking for an apartment or villa to rent in any city, finding a place that perfectly suits you as a single person, a couple or a family is only half the battle won. After you select a flat or a villa, the paperwork begins. And with the paperwork come the associated costs.
So what’s the situation in Dubai? What are the kind of costs a prospective tenant should expect to pay and budget for, when taking up an apartment or villa on lease?
1. Brokerage: The first thing you will probably notice in any advertisement for property on rent is the agent’s commission. Here in Dubai you can expect to pay up to five percent of the agreed annual rent as a brokerage fee. Typically most local landlords appoint an agency to manage the affairs of their properties. This would mean that even if you find a property through a friend or by walking in, you would be required to pay the agents. There are a few properties however, where you interact with the landlord directly and no commission is involved.
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2. Security deposit: You can expect to shell out another five percent of the annual rent as a security deposit to your landlord. Article 20 of the Real Estate Legislation provides that this security deposit may be obtained from the tenant to ensure maintenance of the property until the contract expires. Either the whole or part of this deposit (depending on any damage to the property) is refunded to the tenant when the lease is over.
3. Ejari registration: As per law number 26 of 2007 it is mandatory to register all tenancy contracts of Dubai with the Real Estate Regulatory Agency (RERA) through the ‘Ejari’ system. While tenants and landlords are jointly responsible for registering the contract with Ejari, it’s a common practice in Dubai to expect tenants to complete the registration formalities and pay the related cost. The cost is typically AED 160 for registration and AED 35 typing fee. There is a separate fees for online registrations. You will need your original tenancy contract, a DEWA bill, a copy of the title deed or site plan and a copy of your passport and visa.
4. DEWA connection: Before you move into your newly found property, you would have to setup a new connection in your name with DEWA for electricity and water supply. A new connection with DEWA costs AED 100. There is also an additional administrative fee of AED 10. Other than this, you will be required to pay a security deposit which is refunded when you vacate the premises and provide an original receipt. For villas this security deposit is a fixed amount of AED 4,000 and for apartments it is AED 2,000.
5. Housing fee: Once your DEWA connection is setup, you will be charged a housing fee for provision of the service apart from the actual consumption cost. Housing fee is fixed at five percent of your annual rent and is divided into 12 to be paid as monthly installments. It is reflected in your DEWA bill every month.
6. Gas connection: Another charge you should expect to pay is for setting up a new gas connection and the security deposit. This cost can vary depending on the company which provides gas services to your property.
7. Etisalat / Du: For internet, tv and landline services you would be required to set up an account with Etisalat or Du, depending on the locality of your rental property. While installation cost for any service from Etisalat is AED 199 and from Du is AED 200, what you would pay in total would depend on the tv package you choose, internet speed, type of router etc.
8. Chiller fee: Being a region with a particularly hot climate, a lot is done in the UAE to provide cooling and air-conditioning to residential, commercial and industrial areas. Usually landlords of properties are obligated to pay the Dubai government a chiller fee for provision of district cooling service to their building, while the tenant pays the cost of actual consumption. However, in some cases, this fee could be passed on to tenants via the lease contract. Chiller fees may vary from building to building and can range between AED5 to 7 per square foot. Landlords may also install individual chiller meters to each apartment or villa to calculate the tenant’s due.
9. Maintenance: Like the chiller fee, the landlord is obligated to pay for the maintenance and infrastructure of the property. However, if the lease agreement enlists that this fee would be borne by the tenant, you would be required to pay a maintenance charge on a monthly or annual basis. Be sure to check with the agent or landlord before you commit to a lease contract on who bears the burden for the chilling and maintenance of your property.
For example, if you’re renting a two-bedroom apartment in Dubai for AED 151,000 (the average for a two-bedroom apartment in Dubai at the start of 2016, according to Bayut.com), this is how much you’ll be paying additionally in associated costs:
|Fee categories||Annual Cost (AED)|
|Housing fee (usually spread across the year in your DEWA bill)||7,550|
|Du/Etisalat installation (does not include package)||199|
|Chiller fee (not a fee mandatory in all areas)||8,400|