Property dispute regulation needs to find the right balance

Any discrimination based on nationality needs to be addressed, writes Peter Hellyer, but Dubai's real estate regulator must strike a balance amid competing concerns

It was reported recently that Dubai’s Real Estate Regulatory Agency, RERA, is to step up investigations of what were described, in a newspaper article, as “illegal practices of some landlords, specifically related to setting unjustifiable conditions like accepting tenants of certain nationalities”. What was meant, it became apparent later in the article, was landlords actually refusing to accept tenants of some nationalities.

A whole host of other complaints were listed. One interviewee found it “bizarre” that some property owners want to know where a potential tenant works and whether his employer is a “reputable” company, also asking for a salary certificate and a bank statement. Another complained that some landlords insisted that only a maximum number of four family members could live in the rented property, while another was surprised that some landlords want to interview potential tenants before deciding whether or not to go ahead and sign a rental agreement.

I accept that the issue of discrimination on the basis of nationality is something that needs to be addressed, although I can also understand that there may be a reluctance among owners to accept tenants of a cultural background that is very different from their own.

Many other complaints, however, seem to be, at best, rather unreasonable. If a property is suitable only for a family of four, it seems eminently sensible to impose a restriction on the number of occupants. An overcrowded flat may well need more maintenance at the end of a contract, leading to additional costs for the owner. Asking for details of a potential tenant’s employer or of their salary? Again, perfectly sensible, as a way of checking whether the tenant is likely to be able to pay the rent due promptly. And is it really unfair if a landlord wants to interview a potential tenant? Surely not – after all, if a property-owner is allowing someone else to live in it, it is only sensible business practice to try to get some idea of the nature of the person, and the family, to whom he or she is entrusting the property.

I declare an interest here, both as a tenant and as a property owner. As a tenant, I am quite happy to tell my landlord where I work, and would provide a salary certificate and bank statement if required. If I had any problem accepting conditions laid down by the owner, about the number of people permitted to live in the property, for example, then I would look for somewhere else, within the constraints of my budget. As for meeting the owner, that would be a pleasure, although in my case it’s a company, rather than an individual.

As an owner, I consider it to be my right to lay down conditions, on, for example, the number of people who can live in the property or the nature of any pets. I want to have a reasonable level of confidence that any potential tenants are likely to keep the property in a good state of repair – and I have good reasons for doing that. A few years ago, a flat I managed needed to be redecorated at the end of a tenancy, at my expense, because the tenant’s children had been allowed to scribble all over the walls. Do I insist on meeting potential tenants? Yes, of course – they are using my property, and I have every right to take appropriate measures to try to determine whether they can be trusted with it. In many countries, though not here, landlords almost always insist that potential tenants should submit references, as would be the case in an application for employment. That’s reasonable too – it’s generally easier to get rid of an unsatisfactory employee than a bad tenant.

All these factors are relevant, as well as the level of the rent. There’s no point holding out for a few thousand dirhams more just to get a tenant who won’t look after the property and will leave behind them expensive repairs to be done after they’re gone.

RERA is doing a good job, in difficult circumstances, trying to balance the conflicting interests of tenants and owners. It would be a pity if the balance swung too heavily in favour of either side. At the end of the day, though, the owner must be able to decide whether they wish to accept a new tenant. Were rules to be introduced to remove that ability, then property now available to rent would disappear from the market – and that would benefit no one.

Peter Hellyer is a consultant specialising in the UAE’s history and culture