Yes, these extended notices are being issued by landlords and property owners as a result of Dubai’s extraordinary demand for developed property. These property owners/sellers want to make sure that after a contract is signed with the new buyer/tenant, they won’t have to wait around for the property to be vacated by giving 12-month notices.
Due to the high demand, villas in Dubai that are “empty on transfer” are even more expensive.
These prolonged notices are being sent for additional reasons. Existing renters are becoming aware that, rather than looking for a new place to live, they could be better off renewing their lease, as Dubai rentals in premium and mid-tier locations have increased by an average of 20% or more over the past year. Given that the city’s population is growing, the majority of real estate professionals anticipate this trend to last well into 2019.
The problem arises for landlords during renewals. Even if they want a big increase for a renewal, it’s likely that the new lease won’t be comparable to what they may receive from finding a new tenant.
According to Richard Waind, Group Managing Director at Betterhomes LLC, “Landlords are aware that renters who are paying lesser rentals are sticking put.” Even with the RERA-calculated rent hikes, renting an existing unit with all the increases may still be less expensive.
Therefore, landlords are in some cases providing 12-month notice for tenants, to ensure everything is clear well in advance of the normal 90-day notice period (for them to vacate).
– Richard Waind, Group Managing Director at Betterhomes LLC
Since the first few weeks of this year, a lot has changed. Most tenant-residents in Dubai at the time preferred to choose new residences over renewing their current leases. By this time, more residences had also been delivered, whether in posh Dubai Hills or the brand-new residential hotspots like MBR City or Damac Hills. The same was also occurring at JVC and Al Furjan’s mid-market outlets.
However, the demand for new homes in Dubai’s residential clusters is outpacing the supply by a wide margin.
Everything changes in the summer.
The summer just past saw an increase in more than just the temperature. By July, rent increases had dramatically increased, causing tenants to reevaluate their course of action. The rush for rejuvenation began at that point.
Paying more for “empty” homes
At the same time, the demand for real estate in Dubai remained steady from the beginning of June until the end of August. And they demanded the freshly purchased homes be delivered right away so they could move in.
Less than 30% of the available villas are currently vacant on transfer (VOT), according to Waind. There are many landlords today who serve notice for their tenants to vacate and then try to sell since VOT villas would sell for a premium.
“Landlords can only give notice to renters to leave for one of three reasons: to sell their property, to move in themselves or members of their immediate family, or to make significant and necessary modifications. We are observing landlords attempting to serve notice in order to raise rents, but we caution them against doing so because they run the risk of RERA penalties and sanctions.”
Publish Date: October 25, 2022
Source: https://www.khaleejtimes.com/visa-and-immigration-in-uae/uae-golden-visa-scheme-expanded-new-categories-benefits-announced
