A Downtown Dubai tenant is causing problems for the landlord. Jaime Puebla / The National
A Downtown Dubai tenant is causing problems for the landlord. Jaime Puebla / The National

Dubai tenant refuses to accept eviction notice and tries to stop landlord selling property



I wanted advice on selling my apartment and dealing with a difficult tenant. I first rented out my apartment in Clarens 2, Downtown Dubai, in October 2012. I would have preferred to sell but having bought at the peak in May 2008 at Dh3.1 million, I could not afford to cover the gap between my mortgage and the market price at that time. I renewed with my tenant again in October last year but did tell him that I wanted to sell the property as the price was moving in the right direction, and I would be looking to sell at Dh1.8m. Now the price has reached and exceeded this level and I am keen to sell. However the tenant is being difficult and saying I have to send a notarised vacating letter. When I sent a vacating letter by courier, he refused to accept delivery. Please can you advise what I should do to get the tenant to leave so that I can sell the property. He is not even letting me do any viewings or provide any pictures of the apartment. I also read that if I want to increase the rent at the renewal date in October, I have to give 90 days notice of the rent increase. AZ, Dubai

As a landlord you have the right to sell your property and in wanting to do this, you will have to give your present tenant a 12-month notification to vacate. The best way to go about this is to use a notary public. There you can also organise for it to be delivered via registered mail. The courier company is given the task to deliver the document in the proper manner. A tenant can obviously be difficult and try to refuse to accept this, but by law it would be deemed delivered if this notice is produced and handled in this way. Sometimes courier companies stick the notice on the door or slide it under the door. Politely remind your tenant that reasonable access to the property for viewings and so forth is allowed and that he should be flexible in this regard. Any changes to the contract have to be communicated to either party giving 90 days notice. This would include the rent amount or the number of cheques and so on.

I am a tenant in a two-bedroom apartment paying an annual rent that is 8 per cent higher than the relevant rate according to the Rera calculator. My landlord's office has sent me a notice as per the tenancy contract, for the tenancy renewal, without mentioning the renewal rent amount. On speaking to a member of staff at the office, I was informed that the rent would increase by 30 per cent. Is an increase exceeding 20 per cent allowed? RM, Dubai

You do not mention exactly when your tenancy agreement is due for renewal, but in any case the landlord has to give you 90 days’ notice before the expiration of the existing tenancy to alter the contract in any way, and this obviously would include the rental agreement. If your landlord has missed the 90-day window, then he is not entitled to any changes to the contract – therefore no increase should be allowed. Also, a 30 per cent increase in rent in one year is not allowed. Generally the maximum a landlord can increase in any one year is 20 per cent, but the actual rental amount has to be checked individually against the calculator after inputting all the data.

My rental contract in Dubai is due to renew next month, and the owner of my apartment wants to increase the rent. According to the Rera calculator, he has the right to do so but he has missed the 90-day notice required by the law. As I like the place and have had a good relationship with the owner, I was planning to offer him a lower increase (5 per cent instead of 15 per cent) in exchange for signing a two-year contract. My question: would a two-year contract be legal? Will the owner be compelled to respect it? JMS, Dubai

The law states that both parties need to inform the other of any changes to the contract giving 90-days notice. In this instance, your landlord has missed this window, so by law, you should be able to renew at the same terms and conditions as before. If you decide to negotiate, however, this is entirely up to you and your landlord to agree on different terms than what the law states. I agree that sometimes tenants need to look at the bigger picture and bend the rules to favour the landlord. If you therefore want to sign for a two-year contract and your landlord agrees, then this is perfectly legal, but I suggest you put in provisions to protect the landlord in terms of rent for the second year.

Mario Volpi is the managing director of Prestige Real Estate in Dubai (prestigedubai.com). He has 30 years of property industry experience in the emirate and London. Send any questions to mario@prestigedubai.com

The advice provided in our columns does not constitute legal advice and is provided for information only. Readers are encouraged to seek appropriate independent legal advice

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She moved to the International Federation of Red Cross and Red Crescent Societies before moving to the World Health Organisation as a communications officer.

She came to the UK in 2007 after securing a scholarship at London Metropolitan University to study a master's in communication management and met her future husband through mutual friends a month later.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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