Abu Dhabi property law to give landlords more control

RENTAL MOVE: Abu Dhabi is to introduce new legislation for the rental market. (Getty Images)

New real estate legislation in Abu Dhabi will make it easier for landords to evict low-paying tenants, it was reported on Thursday.

Under the new law which is to be implemented in the UAE capital in November, judges will settle rent disputes under the umbrella of the Ministry of Justice, UAE daily The National reported.

It said that while the five percent rent cap will remain, the legislation will allow landlords to evict tenants at the end of the lease period, after giving two months’ notice for residential property and three months for commercial property.

The new law removes the automatic right of tenants to renew leases for five years with a maximum five percent rent increase each year, the paper added.

While rents in Dubai have plummeted during the global economic crisis, they have remained at higher levels in Abu Dhabi because of a lack of accommodation on the market.

In a report published last month, CB Richard Ellis said residential rents in Abu Dhabi declined in the final quarter of 2009 but at a slower rate than at any point during the previous year.

One-bed apartments showed the strongest performance with just a four percent drop compared to the third quarter with a typical property fetching AED90-130,000 per year.

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READERS' COMMENTS

Maybe there would be other ways
Posted by Ela Huber, Abu Dhabi, UAE on Sunday 14 March 2010 at 08:19 UAE time


As long as contracts do not have to be registered with a goverment organisation - the 5% law in the way it would be from November is a law without effect. If a tenant is evicted because of the low rent he is paying the landlord for sure will not look for a tenant which pays him 5% more :) - It would be much more efficent and easier if there would be some regulation on the rental rates - e.g a Bldg 15 years old in Hamdan - renovated 10 years ago shall have a rantel rate of "xxx" Dhs per m2 - and so on. - If this law is taking effect in November we will see a lot of people move to Dubai - 2 B/R for 70k in Bldg with pool/gym/parking and 12 cheques - Abu Dhabi can't beat that - at the moment at least.

New rental law.
Posted by Mustafa Shabbir, Abu Dhabi, U.A.E. on Saturday 13 March 2010 at 10:52 UAE time


This will have a major impact on the rental market & the freehold property of the Abu Dhabi.

Due to old rentals there are many people staying without choices in older cheaply rented appartments.

With the new law, they will get evicted and will be obliged to rent houses in newer terms and thus will start looking at different options including buying properties in Abu Dhabi, which they had not envisaged earlier. These are the same people who have lived a very conserative life since past many years and due to their conservative type of lifestyle are having savings in banks.

Thus driving the real-estate market upward and this upward drive will not be based on speculation but more on user based requirements.

End of an era
Posted by Shawn, Abu Dhabi on Thursday 11 March 2010 at 15:09 UAE time


This law will impact a lot of people as landlords will evict most of the tenants and in turn impact the overall market. The majority of the people earn between AED5,000 to AED20,000. There are fair few between AED21,000 to AED40,000 and a miniscule percentage above AED40,000. Thus, this might make certain companies to struggle and retain employees as they will not be able to afford them.

I hope this does not drive SME sector and putting pressure on the supply in the medium to long term. We were thinking of investing in Abu Dhabi, but this is very scary for us. Maybe we are over reacting, but this law looks like a step back without a proper regulatory body in place.

what about the Off plan sale
Posted by ramez, Dubai, UAE on Thursday 11 March 2010 at 12:36 UAE time


Abu dhabi still ahve a long way to go since there are NO officail regulations to monitor all teh new developments , were is the equivilance of RERA in the capital , were is teh escrow law , were ..... so many , or will it be all in one in November ?????

lets hope and pray for the day were we will have a UAE law ,

may god be with the invistors every city have a diffrent law ...

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