What payments must a tenant make when leasing a property?
When leasing a property in Dubai, tenants are required to make several key payments to secure and maintain their rental agreement. Here’s a detailed breakdown of the typical payments involved:
1. Security Deposit
Amount: Generally, the security deposit is 5% of the annual rent for unfurnished properties and up to 10% for furnished properties.
Purpose: This deposit is held by the landlord to cover any damages beyond normal wear and tear. It is refundable at the end of the tenancy, provided the property is returned in good condition.
2. Rent Payments
Payment Method: Rent in Dubai is usually paid via post-dated cheques. The number of cheques depends on the agreement with the landlord, commonly ranging from 1 to 4 cheques per year. Some landlords may accept more frequent payments, but this is less common.
Frequency: The rent can be paid annually, biannually, or quarterly, depending on what is negotiated in the tenancy contract.
3. Agency Fee
Amount: If a real estate agent is involved, the tenant typically pays an agency fee, which is usually 5% of the annual rent.
Payment: This fee is usually paid upfront when the lease is signed.
4. Ejari Registration Fee
Amount: The fee for registering the tenancy contract with Ejari, the official rental contract registration system in Dubai, is AED 220.
Purpose: Ejari registration is mandatory and provides legal recognition of the rental agreement, ensuring both the tenant's and landlord's rights are protected.
5. Utilities and DEWA (Dubai Electricity and Water Authority) Deposit
Amount: The deposit for DEWA services typically ranges from AED 2,000 to AED 4,000, depending on the size of the property.
Purpose: This deposit is required to set up electricity and water services in the tenant’s name. It is refundable upon closing the DEWA account at the end of the tenancy.
6. Chiller Charges (if applicable)
Amount: In some properties, particularly in areas like Dubai Marina, chiller (cooling) charges are billed separately. This is an additional cost on top of the DEWA charges.
Purpose: These charges cover the cost of air conditioning, which is often centrally managed in high-rise buildings.
7. Maintenance Fees (if applicable)
Responsibility: While major maintenance is typically the landlord’s responsibility, some tenancy contracts may require tenants to cover minor maintenance costs or regular servicing (like AC maintenance).
8. Parking Fees (if applicable)
Amount: While most properties include at least one parking space, additional parking spaces might incur extra fees.
Purpose: This fee is generally applicable to properties in high-demand areas where parking is limited.
By understanding these payments, tenants can better prepare for the financial obligations of renting a property in Dubai, ensuring a smooth and transparent leasing experience.
