Will look into both residential and commercial rental disputes with 30-day settlements
Dubai: Dubai’s newly created Rental Dispute Settlement Centre, which will start operations in early December, will adjudicate on both residential and commercial disputes, a top official at the Dubai Land Department has confirmed. More than 200 disputes will be heard — and verdicts delivered — each week by 10 committees, with the stated aim of resolving disputes within an optimum timeframe of 15-30 days.
The current rent dispute body — known as the Judicial Committee — hears about 100 cases a week and a judgement could take up to three months.
Eight of the new committees represent the court of first instance, while the other two committees will oversee any appeals. The Decree issued earlier makes it clear that any judgments of less than Dh100,000 will be binding on both parties in a dispute. As and when the legal team is expanded further, it is possible that the new Centre could take up to 600 disputes a week, officials said.
Before it reaches the first instance level, the parties involved in a dispute can press their contending claims with the ‘Conciliation and Reconciliation’ department.
Top officials at Dubai Land Department, under which the new entity will function, said fast-tracking the resolution of rental disputes required the creation of a new “judicial arm” for the local estate sector, similar to what the Real Estate Regulatory Agency plays on the regulatory side.
As of now, the legal fee — 3.5 per cent of the contractual value — will be similar to what exists at the existing rent dispute agency. However, whether the new entity requires its own fee structure could be decided once the services are launched, said Sultan Butti Bin Mejren, director-general at Dubai Land Department.
The Centre will, however, not take up disputes involving lease-to-buy contractual agreements nor will it cover long-term lease disputes and properties falling within free zones. There will be multiple branches of the Centre located in Dubai apart from the main one in the Dubai Land Department premises.
These moves by the Dubai authorities could be a preemptive move to ensure that rentals across the emirate do not spike too fast in too short a timeframe. In the year to June, rents have gone up by 15 per cent according to the latest market update from Knight Frank.
But anecdotal feedback suggests that in some locations some landlords have been quite arbitrary in their demands, which is where the risks lay for the property sector. If as expected Dubai does win the nomination for Expo 2020, real estate pricing and leasing structures could be in for a sharp further revision.
That the new agency will also cover the office rental marketplace will have come as a major relief for corporate tenants. While the steady supply of new office stock has so far ensured office rentals have not made gains on par with residential rates, it may not be long in coming. More so as the economy is continuing with its upward trajectory and should receive another ballast from a favourable announcement on Expo 2020.