Friday, September 25, 2015

Moving, just keep moving

Since I packed my bags and departed for university in 1997, I have moved residence, if you include moving between different digs, I reckon, 15 times. And wouldn’t you know it? We're about to fuel up the magic carpet and embark on move number 16 at the end of next week.

Desert Baby needs her own room - the best we can afford without shelling out most of our income on rent in town is a one bed - so we’re moving to the ‘Burbs, baby, where property is (comparatively) cheap, the air is clean(ish, if you don’t count the airport emissions) and the people are friendly(ish).

You may have read about the infamous Dubai property crash in 2008. Well, one of my old bosses, a real estate firm CEO, would tell you that lessons have been learned from that experience, that there is a mature secondary market now, people don’t buy into the property market hype in the same way as they used to. My response to that, would be: “Meh.”  

I’ve been in our fair Emirate four and a half years, so I may not fall for the same old tricks as unfortunate newbies do, such as agreeing to sign non-renewable contracts so the landlord can turf you out in favour or someone willing to pay a much higher rent at the end of a year, but the market can still be somewhat hair-raising.

Touch wood, in a week’s time, we should be settled into our new place.  If you're embarking on the same task, particularly for the first time, here are my top 10 need to know rants about the joyful process that is renting property in Dubai, some of which I picked up from my brief career interlude working as a copywriter for an estate agent, and the rest from bitter experience.

Upfront rent

Unless you negotiate with your landlord otherwise, you will be expected pay your rent one year in advance, either in one cheque, or in a series of post-dated cheques. Rents are advertised per annum rather than per month, so try not to have a heart attack when you see the prices. On top of this you will need to also find a deposit for DEWA (electricity and water provider) a landlord deposit, (usually five percent of the annual rent) and if you've used an agent, their commission (also usually five per cent).

How the heck do people afford to pay all that at once?

Some expats, although fewer and fewer, get generous financial packages from their employers to allow them to set up home in Dubai. Many receive a housing allowance as part of their salary, and this can be drawn up to a year in advance. The first year Him Indoors did this, his cheque was refused, for some piffling reason to do with an irregular mark on it. The best way to solve this quickly was for him to draw the money in cash and hand it over. Him indoors had to go to work, so I had to sit in the bank waiting for our new landlord, who was two hours late, clutching AED85,000 in cash in a brown envelope. Those who don’t get a housing allowance have three other choices: Apply to their work for a salary advance, take out a bank loan to pay their rent, or save like mad before they even think about coming to Dubai and renting a place to live.

More on those post-dated cheques

Many of us fortunate enough to receive a housing allowance pay in one cheque so we can forget about rent until three months prior to the end of our contracts when it’s time to think about renewing or moving. Those who don’t have that option pay in two or more post-dated cheques. When the market is really in the doldrums, or a property is a bit dodgy, the landlord may allow up to 12 cheques, so you’re effectively paying the rent monthly. You can tell when the market is overheating, as landlords start demanding one cheque for even rat-infested “studios” (bedsits) with a view of Dubai Municipal Waste Dumping Area.

What is with Dubai estate agents? Seriously? Isn’t it easy money? Why are they (mainly) so dreadful?

Oh, habibis, if only I knew. The first agent that Him Indoors and I ever dealt with was a dream. She spoke fluent English, she negotiated well on our behalf with our landlord, she answered phonecalls, she returned emails, she dealt with queries efficiently. *Sigh*. What happened to her? Her employer obviously spotted she was pretty good as she got promoted, and as far as I’m aware, she is still working as an area manager for the same agency and no longer deals directly with clients. 

Agents are a strange breed here. Examples include many who don’t bother to turn up to show you round a property, and if they do, they won’t know anything about it, such as details about who pays what charges, when the construction next door is due to be complete and what the heck it is they’re building. Another agent Him Indoors dealt with recently spoke some English, to a degree, but the only directions he could give to the property were “It’s near Spinneys”. There are about 30 branches of Spinneys in Dubai, but even when this was pointed out to him, his response was “It’s near Spinneys?” “Which Spinneys?” “It’s near Spinneys”, in the manner of the way Hodor says “Hodor” in Game of Thrones

These are the people to whom you routinely hand over a commission of five per cent of your annual rent. Money you will never see again. I’ll just let that sink in.  

And what about the landlords? What’s their problem?

The cretin-like behavior extends to landlords, even when it comes to viewings. Him Indoors and I were unfortunate enough to be looking for a new place at the height of the post EXPO2020 bid victory hype in March 2014, and we looked round a tiny one bed flat in a not particularly nice building in Jumeirah Lakes Towers. It had a view of a building site, eye-wateringly horrible carpets and the tenant had clearly done a bunk. Their crappy clothes were hanging out of the broken wardrobe, a pan of something congealed was still on the stove, toothpaste was smeared around the bathroom sink, with something worse smeared round the toilet and the balcony was covered in cigarette ends and other rubbish. The rent being asked, from memory, was AED90,000 per annum, that’s 16,000 sterling. All credit to the agent, she had more front than Blackpool, as she didn’t even bat an eyelid about the revolting state of the flat, but politely agreed with us when we said it probably wasn’t the property for us.

I have given the question of what the hell is wrong with these people quite a lot of thought during my time in Dubai, other than the fact that many of them are foreign investors who have little or nothing to do with their property and simply hand the running of it over to an agent. To be fair, I have heard tell of landlords who *sharp intake of breath* don’t try to impose huge increases, don’t try to turf you out as soon as the market looks like it’s on the up, and *faints* carry out and/or pay for maintenance.

I’ve always suspected that due to aforementioned property crash, many buy-to-let landlords feel they were sold something that did not quite fulfill the huge income potential they were promised, so they resent the heck out of tenants. To give you an idea of what I’m talking about, we rented a property in Downtown in March 2011 for AED85,000 (just over 15,000 sterling) per annum as that was the market rate. The landlord told us that in the “good times” prior to the property crash, he had rented it for AED200,000 (nearly 36,000 sterling). This may have been a bit of an exaggeration, but, no wonder he was a bit shirty with us when we phoned him in the first week to tell him the fridge was knackered.

A bit more about maintenance

I detailed in a previous post some time ago about an incident I shall now refer to as "washingmachinegate" in which a landlord’s agent got pretty nasty with me when we had the temerity to ask him to fix or replace a broken appliance. It seems that several of the landlords from who we have had the misfortune to rent property see the payment of rent as the tenant effectively owning the property for the year. Therefore their view is that any issues, including, say, damaged paint from a water leak which was caused by a tap which wasn’t installed properly, broken washing machines, etc, are the tenant’s responsibility. This is hard to get your head round as a tenant, particularly a tenant with experience of the UK, where many landlords take more interest in and responsibility for their property.

“Why don’t you just buy a property so you don’t have to deal with this nonsense?”

What a brilliant idea. Thanks for suggesting that. Foreigners need a minimum 25 per cent deposit to buy property, so can you lend me hundreds of thousands of dirhams please? Go on, I’m an excellent prospect. My turnover in freelance commissions has been literally in the hundreds of pounds sterling since Desert Baby was born, and I have as yet no source of regular work, and if I do get regular work, I will need to pay for childcare, and, oh yes, I may want to move to a different country within the next year or so depending on my husband’s work. What do you mean you don’t want to lend me any money? Wait, stop laughing me out of your bank. You’re just mean.

If you’ll excuse the facetiousness, yes, buying property would be a way to avoid the silliness of Dubai landlords, but that’s not exactly straightforward. Raising the cash for the deposit would mean selling our UK property. Call me overly-cautious, and not to detract from the wondrous nature of the Dubai property market and the breathtakingly brilliant future prospects of the Emirate, but I think the London property market may be a slightly safer bet for the risk-averse.

“Big” landlords

Him Indoors and I are trying a new experiment this time by renting directly from a developer, to see if dealing with them when it comes to things like maintenance and renewal of contracts is any less irritating. Some developers have kept certain developments and derive income from renting the entire thing out. They have maintenance offices onsite with technicians ready to answer calls for set fees. I am also hoping that when it comes to renewals, if there is a rent increase, they will increase according to the government rent increase calculator and that’s it. Hoping. Examples of “big” landlords are Arenco and Al Ghandi Property.

Know your stuff

Don’t get caught out like him indoors and I did when we got kicked out of our first apartment. We got evicted because we were told our landlord wanted to live in the property himself. This is legal, but the landlord has to give you 12 months’ notice, rather than kick you out straight away like ours did, ditto if they want to sell the property. As far as I’m aware, the law states that Dubai residential tenancy agreements are automatically renewed at the end of the year unless 90 days’ notice is given by either side prior to the end of the contract. Technically, if you’re planning to leave, you need to give that 90 days notice before the end of the contract, or you could be liable for the next year’s rent. However, I have never heard of a landlord enforcing this. You also need to know that tenancy agreements are technically enforced by law, so if you want to leave early, there may well be penalties to pay to your landlord, for example, an extra two months' rent. As for rent increases, they are supposedly regulated by the government, so your landlord can only increase the rent if the rental increase calculator says so. Click here to check it out. 

..      Good luck

You have my sympathy. Really. If you end up with a duff landlord, you can consider opening a case at RERA  the Real Estate Regulatory Agency. 



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