Dubai rent cap may relax

By Saifur Rahman, Business News Editor

Dubai: Dubai's seven per cent rent cap could be relaxed, a source told Gulf News on Monday, as the emirate's overheated property market is expected to come under a planned regulation once the new Real Estate Regulatory Agency (Rera) begins to act.

"Either the current seven per cent rent cap will be relaxed or kept the same. It will not go beyond the existing level," a source close to Rera, speaking on behalf of the new entity, said.

"We can expect a decision by December as Rera will advise the government on the rent cap."

The news comes at a time when members of Dubai's expatriate community have begun counting costs of another jump in rents.

Landlords often take advantage of a lack of housing supplies by hiking rents and in some cases by nearly doubling them - a trend which prompted the government to intervene through a partly successful rent cap.

According to the International Monetary Fund (IMF), the 44,000 homes coming onstream in the UAE this year won't be enough to meet the rising demand.

"Rera was launched as a part of Dubai's 2015 vision for economic development and falls in line with the current developments within the real estate sector," Marwan Bin Galita, chief executive officer (CEO) of Rera, told members of the Dubai Property Group (DPG).

Rera will have an advisory role on issues like the rent cap. The Rent Committee, which handles rental disputes, is also expected to be brought under Rera's jurisdiction, he said.

"Rera's main objective is to establish the foundation for a globally attractive real estate sector that satisfies and guarantees all stakeholders' rights and expectations," he said.

Responsibilities

Bin Galita highlighted Rera's main responsibilities which include: licensing real estate activities, managing developers' trust account, licensing and organising real estate agents, regulating and authenticating rental agreements, regulating and supervising owners' associations, regulating real estate related advertising, regulating and licensing real estate related exhibitions, publishing and circulating official sector research and studies, enhancing national participation in the real estate sector and increasing real estate awareness.

Punitive measures on delays remain unclear

However, it still remains unclear what penalties will be imposed on the developers who fail to deliver properties in time.

"Issues related to the delays will be governed by the purchase contracts that should specify the penalties.

However, Rera will investigate the delays whether they were caused due to external factors such as a change in road networks or a delay in electricity or sewage connections," he said.