It’s hard to imagine the scale of Expo 2020 and therefore easy to underestimate its impact. It is the third largest event in the world with only the Olympics and the Soccer World Cup being larger however, while the Olympics and World Cup are conducted over a relatively short period of time, the Expo will be conducted over 6 months.

It is estimated that over 270,000 jobs will be created in Dubai with 90% of them in the period 2018 to 2021. The majority of these jobs are expected to be created in the tourism and hospitality sector while 80,000 jobs are expected to be created in the construction industry, the majority of which will be required to build the Expo site itself. Located in Jebel Ali, the Expo site will encompass 438 hectares and will consist almost entirely of hospitality and tourism amenities with at least 180 exhibition pavilions to cater for the 25 million visitors who 20% during the 6 months of the Expo.

The total costs are estimated at $8.8 billion with $7 billion required to develop the city-wide infrastructure, the Expo Area and its surrounding site. The benefits to the UAE economy from infrastructural investment, job growth, and massive increase in tourist revenue are enormous and obvious. Economies grow on the back of investment and investments of this scale are rare as are the resulting benefits in terms attracting more tourist dollars and further embellishing the brand Dubai. For Real Estate, hosting the World Cup is likely to create a boom in the industry. The last city to host a World Expo was Shanghai in 2010. Despite being held during the worst global recession in history, property values grew in excess of 60% in the 12 months before the event was held. While Dubai may not achieve such stellar value growth, the predictable surge in demand for accommodation of all types, from labor camps to apartments to executive Villas, for the additional 270,000 or so new job holders is sure to have a significant effect on values.

In addition, demand for office and commercial space is also likely to increase as existing businesses expand and new business entities set up operations to support the conduct of the event or service the bevy of new business operators or the millions of additional visitors. There is no doubt that the Expo will help re-balance supply and demand in this area. Retail space is likely to be at a premium as visitors will not confine their spending to the Expo site alone. In addition, 25 million visitors require a place to stay and, with Dubai’s hotel industry already enjoying consistently high occupancy rates, more hotels need to be built and serviced. Many of these are already planned as part of Mohammed Bin Rashid city.

Loan ceiling of 80% of property value for Emiratis, 75% for expats

The UAE Central Bank has issued the long-awaited mortgage lending system, which allows the country’s banks to provide a loan of up to 80 per cent of the property value to Emiratis and 75 per cent to expatriates.

The new rules which were released by the Central Bank on Monday will be enforced one month after they are published in the official gazette this week.

A statement by the Central Bank stressed that the 23 national banks and 28 foreign units operating in the second largest Arab economy must take into consideration the debtor’s eligibility and financial resources.

It also told banks to ensure they would not give loans that exceed 50 per cent of the client’s monthly income.
The new rules stipulated that mortgage loans to Emiratis must not exceed 80 per cent in case the property value is Dh5 million or less.

The loan must be cut to a maximum 70 per cent in case the property value is above Dh5 million.
Loans to expatriate clients must not exceed 75 per cent of the property value of Dh5 million or less and 65 per cent if the property value is more than Dh5 million.

As for clients buying property before construction or on the map, the maximum loan they can get is 50 per cent of the unit’s value.

The law set a maximum period of 25 years for a mortgage loan provided that the Emirati debtor must not exceed 70 years of age when repaying the last installment of the loan. As for expatriate clients, the law set the maximum age at 65 years.

“The Central Bank, by issuing this new system, wants to ensure all banks and financial institutions in the country have authorised and credible business criteria and effective frameworks that will control their mortgage loans,” Central Bank governor Sultan bin Nassir Al Suwaidi said on Monday.

Of the various people in the property industry with direct relations marked with sometimes serious complications, it is that which is between landlord and tenant that is usually rife with complexities and issues.

To help us understand that this relationship need not be so controversial, Mohanad Alwadiya of Harbor Real Estate shares his thoughts.

What are some common issues between landlords and tenants?

The three most common issues that arise from the landlord-tenant relationship usually involve disagreements regarding a proposed
rental increase, unjustified eviction, and delayed rental payments. Most disputes regarding rental increases arise where the landlord attempts to increase the rental significantly in order to capitalize on the revenue potential of the property. There have been a growing number of landlords who have attempted to do this with the recovery of Dubai real estate gathering more momentum and increasing market averages for rental receipts. The issue arises when the gap between the current rent payable and the new proposed rent, while seemingly justified when compared to ascending market averages, is too great for tenants to bear. The obvious issue for tenants is that a sudden and significant hike in rental expenses can put pressure on the family budget and necessitate, in some instances, relocation.

Rental disputes in Dubai are currently managed by the Dubai Rent Committee, a body which resides within the organizational structure of Dubai Municipality. There are specific laws governing the degree to which a landlord can increase rent in Dubai and Decree No.2 of 2011 sets out what a landlord can and cannot do with regard to increasing rentals for existing tenants. Both tenants and landlords can visit www.dubailand.gov.ae and access the RERA Rental Increase Calculator to determine for themselves as to whether any rent increase is applicable in accordance with the law.

What are the ways by which landlord-tenant relations can be improved?

As with all contractual relationships, the operation of the contract will always be more effective and efficient if
each party:

• understands and accepts both parties’ rights and obligations according to the wording, provisions and clauses included in the lease agreement;

• complements the above point with a thorough understanding of the law. Quite often, disputes arise out of ignorance, and not necessarily deliberate or malicious intent;

• has the commitment or willingness to resolve disputes through arbitration and reconciliation, supported by sufficient knowledge of each party’s rights and obligations. Quite often, a mediated discussion can reach a solution without the involvement of the Rent Committee.

Of course, the parties must have recourse or access to arbitration and reconciliation processes and procedures and, where these fail, a judicial process which is empowered to provide decisions bound and enforceable by law. In this regard, we are genuinely excited at the prospect of having a world-class Rental Dispute Settlement Centre, scheduled to be operational from December, which will further the development of Dubai as a global leader in all aspects of the real estate and property industry.