The new centre will have authority over rent disputes between landlords and tenants within Dubai and its free zones.
Dubai: The new Rental Dispute Settlement Centre announced over the weekend has been welcomed by industry experts as a step in the right direction to regulate the property market.
The Rental Dispute Settlement Centre announced on Saturday by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President of the UAE and Ruler of Dubai, is set to replace the existing Dubai Municipality’s Rent Committee. The new centre will have authority over rent disputes between landlords and tenants within Dubai and its free zones.
It does not have authority over special judicial committees or courts assigned to settle disputes.
Sallie Bowtell, Senior Associate at Trowers law firm in Dubai, said the new settlement centre is a step in the right direction.
“One of the difficulties with the current committee is that its quite time consuming. It’s good that they will have a specialist community which means disputes can be resolved efficiently,” she said.
Bowtell said it was important to understand that Dubai was an developing market and that the pact of legislation needs to focus on quality rather than quantity.
“The reaction to change needs to be managed and needs to be incremental,” she said.
Jonathan Forthergill, Head of Valuations at Cluttons in Dubai, said that the fact that disputes had increased alongside rising rental prices over the past 12 months showed how much the new centre was needed.
He said the new centre was set to provide more simplified procedures to resolve disputes and was a positive move for tenants.
However, he said that he did not believe either side would have more or less power at the Rental Dispute Settlement Centre.
“Its creates regulation where both sides know they can take it to a third party and that’s a good thing,” he said.
Forthergill said it was unlikely the centre would be major enough to motivate investors but would contribute to establishing more transparency in the market.
Craig Plumb, Head of Research Mena, at Jones Lang LaSalle in Dubai, said the implications of the new committee was that it is now applying the same dispute resolutions for the whole of Dubai.
Previously the freehold areas were treated separately.
“The second major implication is the issue of timing within the 30 day frame…Its an aggressive objective,” he said.
Plumb said the there could be a drive among tenants and landlords to register their lease agreements with the land department.
Claimants who want their dispute heard by the new centre must have their lease registered with the Dubai Land Department.
Bowtell said an increase in registered leases would assist the government in developing legislation.
“By encouraging people to register, the emirate is more adequately equipped to make decisions,” she said.
She said that people often do not register their lease agreement because they either did not know they had to or do not have the time to submit the documents.
Plumb said the new dispute centre would provide protection to tenants in a rising market when rents increase but in a falling market it is likely to work the other way.