The case of non-renewable tenancy contracts.

The case of non-renewable tenancy contracts.

Go through every detail of the contract and make sure you understand all clauses
has your tenancy contract of your ended and has the landlord demanded termination evection instated of renewal check if you have signed a nonrenewal tenancy contract usually tenancy contract are enwalled expect if they are particularly marked nonrenewable or may have some clauses that make them nonrenewal led also sometimes the landlords writes the nonrenewal clauses in ambiguous words which the tenant may be unable to catch at all times of signed the contract.

This strategy is applied by some landlords so they may not be found bound to adhere to any rent cap or in case of DUBAI the RERA rental index. When the landlord issues a nonrenewal contract for one year he can ask the tenant to leaf if the tenant disagree to pay the increased rent in this situation the landlord can avoid any rent cap clause and lease the property to a new titan on a higher rent .
If he tenant has signed and willingly accepted the non-renewable clause in the contract, then he has to comply with the terms and honor the agreement.

As a tenant, before signing either for the first time tenancy contract or renewal contract, it is pertinent to go through it thoroughly and understand all the clauses perfectly. Taking legal device could be helpful to avoid any disputes later. This is particularly useful for expatriates new to Dubai. Also, a tenant should remember that no landlord can forcefully make him sign a non-renewable contract. But the landlord is entitled to send a non – renewable contract when renewal for the new term with a one-year notice.

In case the tenant has signed a non-renewable contract unknowingly and does want to vacate the property, he can try negotiating with the landlord by expressing his desire to renew the contract and see if he agrees. Typically landlords are aware that most tenants would like to renew the lease after the expiry of the original lease. If the landlords and tenants reach a mutually beneficial agreement, the matter can be resolved amicably.

Property Tips

•    Ensure you have full understanding of the tenancy contract and tenancy rights
•    Negotiate with the landlord so you reach a mutually beneficial agreement.
•    Always prefer a renewable contract over a non-renewable one.

Dubai Real Estate: Buyer/renter beware remains relevant today

Buyer/renter beware remains relevant today

Preparation, research and communication will help you find the perfect property.

As real estate agents, we often find our clients making the same mistakes when looking for their dream home or property. Our responsibility is to inform and guide them to make wise choices so they are happy especially after their purchase. Indeed, it makes sense to have return customers and referrals. As such,let us identify the common errors we usually encounter as you can go about your search with a “buyer beware” attitude.

From the outset, you need to be clear if you plan to purchase the property for a home or investment as the two objectives may lead us to choose very different options for you. Once you are clear about the reason, we then ask you to identify your budget, whether buying or renting. This will save you from wasting time and getting emotionally attached to properties you means, so you avoid irrational decisions by taking a measured approach. In the case of mortgage clients, they should arrange for the pre-approval of funds, and cash investors should identify their allocation of funds. You can end up wasting a lot of time if you have arranged pre-approved funds. Renters need to be realistic about their budget and identify locations as per their style needs.

Sometimes buyers are not aware of all relevant costs associated with purchasing property. It helps to do some research first and, as an agent. We should provide a realistic picture of costs-from maintenance charges, agency/transfer fees and costs associated with taking up a mortgage. The market also calls for a cautious and diligent approach to purchasing off-plan so it is better to take legal advice especially regarding this.

Another common error is not investigating the quality of construction and maintenance record. Check the track record of developers and /or master developers regarding the maintenance of the property, and examine the finishing. Understanding the owners association’s role and interacting with the developer also helps.

     With families and couples, there is usually one person thats more rational than other. However, both need to be on the same page and have a unity of purpose. We have seen couples fighting once one becomes fixated on the property and other is not. 

We can’t be marriage counselors, but we do know those who are on the same page tend to walk away happier from their purchase. So, as with many aspects of life, preparation, research and communication will help you find the perfect property.

Dubai Real Estate Tips

·       Mortgage clients should see to it that they already have pre-approved funds.

·       Be cautious and always take legal advice when purchasing off-plan property.

·       Renters need to identify locations as per their lifestyles needs and budget.

Dubai Real Estate- Rent-to-own property-try before you buy

Rent-to-own property-try before you buy

 Prospective owners are not forced to buy property before having lived in it.

The rent-to-own scheme was put in place across the UAE with hopes of jumpstarting the residential market. In effect, it works as a ‘’try before you buy’’ system where prospective property owners are not forced to commit to an apartment or villa before having lived in it, with rental payments being put towards the sale price of the property if and when the tenant decides to buy.

Whilst you would be asked to give a deposit of 10 percent based on the agreed market value of the property before you move in, the remainder of your rent will be paid in more affordable installments.

Most rent-to-own contracts require a three-year commitment although some developers offer a two-year option. The rental price is usually fixed in the first two years, but may be subject to an increase in the third year. After the time lapse, you would have to decide on whether or not you will purchase the property. Alternatively, you would have the option to cancel the contract and be simply considered as having rented the property for those years.

If it does not turn out to be your dream home and you do not decide to purchase, you may have to vacate the residence to make room for prospective buyers who may be interested in giving the property a trial run.

Real estate agencies like Smith & Ken say that this practice gives tenants extra time to arrange a mortgage during the rental period, as well as enables them to use the rental payments as investments.

Sounds ideal. But before signing a contract, make sure you know a few things: are you being charged a premium rent? What percentage of that rent will be converted into equity? What mortgage options will be available if you buy and will you be charged any penalties if you don’t? And most importantly, is the property right for you?

Real Estate Tips

The rental price is usually fixed in the first two years

This practice gives tenants extra time to arrange a mortgage

After the time lapse, you have to decide to purchase the property.

Understanding the logic of offshore trusts

Dubai Real Estate -Understanding the logic of offshore trusts

Highly effective for the purposes of estate planning tax mitigation and asset protection.

When it comes to life in general,legalities are usually the last thing on people's minds,even as most property-related predicaments involve the lack of legal foresight in relation to major life changes such as personal calamities

As anything and everything can change at the stroke of a second, there are some questions you might want to answer to check whether you need serious legal advice: Are you a resident in the UAE? Are you a partner or a shareholder in a business in a free zone or of an LLC? Do you own freehold property either solely or jointly? Do you have children? If your answer is YES to either one or all of the above, you should consider establishing a trust to protect your assets and secure your assets and secure your family's future.

A trust,properly structured and utilized, is highly effective for estate planning,tax mitigation and asset protection. Trusts are instrumental in avoiding probate,an important consideration in the Middle East,where local fixed heir ship laws can prevail. They are especially helpful in asset preservation and protection in case of political,family or business uncertainty (e.g. Unexpected divorce,bankruptcy,litigation); succession planning;consolidation and preservation  of family wealth across generations; business continuity;overcoming cost, and delay of obtaining probate;bypassing local laws with your own succession blue print; professional management of assets for the benefit of beneficiaries; a high degree of privacy and confidentiality,avoiding public disclosure of asset ownership.

To secure yourself and your property, there are few legal consultancies available which specialize in international wills,trusts and taxes that are experienced and fully qualified to advise and assist clients regarding all aspects of trust formation,management and administration . Your consultant should be able to create a bespoke solution that secures and preserves your assets in a way which is uniquely suited to your personal and business requirements, and that you will be entirely at ease with.

Dubai Real Estate Tips

Trusts are instrumental in avoiding probate especially in the Middle East

Legal foresight is essential in protecting your property and all your assets

Your consultant should create a bespoke solution suited to your situation.

UAE’s New Mortgage Rule Will Deter Property Investors

Home Insurance-Always be prepared for the unexpected.

Getting home insurance ensures you are protected from unforeseen threats

Your home is your biggest investment. It houses people and things that are most important to you. Most of us know all about how our homes work but are clueless about how our home insurance works. You can legally own a home without having insurance but that would be rather unwise, leaving your loved ones as well as your belongings open to the threat of disaster.

Home insurance generally covers three things: structure, belongings and liability. Structure refers to the building) roof, walls, stairs, and others).home insurance typically covers fire, water from busted pipes, damage due to hailstorm, and others. Most insurance policies do not cover earthquakes and floods, and you have to buy a separate insurance for that.

Belongings refer to all things in your house, so insurance covers you from theft as well. It is useful to have a home inventory so that you know exactly what you have and how much they are worth. When it comes to belongings, you are insured up to a certain limit only. You may need a separate insurance for high-value items such as gold and jewelry.

Liability refers to accidents happening to others in your home premises. High-risk areas for such caese are the pool, trampoline, or even the stairs. Your home insurance protects you against law suits as well as takes care of the medical expenses of others. Most insurance policies also cover living expenses wherein in cases of an accident such as a fire or flooding from broken pipelines, you may have to stay in a hotel.

Once you are clear about your needs and budget, work with an independent agent who can present suitable options. You can get a professional assessor to help you assess your risks, valuate your property, and suggest a suitable coverage. Ensure your coverage is large enough as building and labor costs are continually on the rise. If you make any additions, inform your insurance agent to increase the coverage. This may not increase your premium hugely, but will definitely buy you peace of mind. When buying the insurance, specifically ask for what it does not cover

Remember, life is all about being prepared for the unexpected.

Home Insurance

Home insurance, in general, covers the structure, belongings, and liability

Most insurance policies do not cover damage caused but natural disasters

Ensure your insurance cover is large enough as building/labor costs are rising

 

  UAE’s New Mortgage Rule Will Deter Property Investors – Experts

The UAE central bank recently issued a ruling to limit home loans to foreigners at 50 per cent of the property’s value.

The UAE central bank recently issued a circular instructing commercial banks in the country to restrict mortgage loans to foreigners at 50 per cent of the property’s value, Reuters reported earlier this week.

While the central bank has not yet confirmed the ruling, the report said that the move was probably aimed at ensuring that the UAE real estate does not develop another property bubble as it did in 2008/2009.

But experts say the new rule could have a negative impact on the property market.
“I would presume that central bank has taken this initiative in order to pre-empt another surge in the bank’s non-performing levels, which in some cases peaked at 20 per cent of bank’s overall loan books and also to weed out speculators from the market,” said Jonathan Fothergill, director of valuations at Cluttons.

“In this respect, I think the general rationale of this instrument is a good and positive step helping to lead to a more sustainable market.

“However, I think it is also inevitable that the initiative will likely impact negatively on the market for end users just as this is finding its feet once more. Not many expatriates in the country can claim to be in a ready position to put down 50 per cent of a Dhs2.5 million property,” he said.
Dubai’s property market, which was the worst hit in the UAE during the financial crisis in 2008/2009, began to finally stabilise in 2012.

Average rents for one, two and three bedroom apartments in Dubai fell 54 per cent between Q4 2008 and Q4 2011, but are now rebounding amidst renewed confidence in the Dubai market, CBRE said in a report published in December 2012.

Lease rates have risen by an average of 17 per cent over the past year , with some established locations witnessing even higher growth, the report said.
Matthew Green, head of research & consultancy UAE, CBRE Middle East said: “Dubai is seeing higher rental growth this year due to a sustained period of population growth, positive economic performance, increased occupier demand, and limited availability of quality units in the most desirable locations.

“Over the last 12 months we have also witnessed an appreciation of sale rates, which have averaged 13 per cent in these areas. Sale rates in the Greens and Downtown Dubai developments have appreciated at notably higher rates, reflecting over 20 per cent year-on-year.”
The new central bank rule will negatively impact this recovery, said Clutton’s Fothergill.
“I think that the cap will certainly weed out speculators and flippers but at the same time will also deter genuine end users,” he said.

However he added that the there might be more modifications to the new ruling in the near future.
“The sudden and immediate arrival of this new central bank rule has caught many involved in the real estate sector by surprise, but I would be surprised if this is the final word on the matter and await to see how this issue plays out over the coming weeks,” he said.

source gulfbusiness

Buyers can now avail of low mortgage rates

 

Buyers can now avail of low mortgage rates- Dubai Real Estate.

The option of buying seems compelling when pitched against the certainty of losing money by renting.

As the post-recession dust settled, the local property scene was classed as a”buyers market’’. It still holds true today, with an increasing number of residents looking to snap up lucrative deal. Many are old-timers in the emirates who are all too familiar with the way rents eat into their pay packages.In such a scenario, the prospect of buying a home makes complete sense.

Property for single people looking to set up a home.-Dubai Real Estate

Property for single people looking to set up a home.

Here's your quick guide to various pricing and location options in the city

So here you are- single,employed as a professional,ready to begin life in the exciting city of Dubai. You've been scouting the real estate classifieds and websites,short listing areas and calling up agents. You have a rough budget in mind, but don't have a solid idea of what the rentals can be. Worry not, and read on.

As a single professional, you must prepare yourself for your single largest recurring expense every month - housing. An expatriate hub like Dubai(with over 180 nationalities at last count) is bound to come with expensive leasing costs for residential space.

Sellers raise the price of their properties-Dubai Real Estate

Sellers raise the price of their properties

Owners are still holding on to their property anticipation of market recovery

In recent months, we have seen many indicators reflecting a better level of confidence in the UAE real estate market. Since August 2011, more transactions have been recorded and banks are offering better mortgage rates to potential buyers.

What effect does all this positive news have? Only a small number of individual freehold property owners have started to raise the asking sales price of their property. Certain master developments witness higher demands than others because they offer premium units which enjoy better views and higher quality finishes.

In the boom years,owners of these properties would have been able to sell their units for higher prices.But since the financial crisis, they have been holding on to their properties in anticipation of market recovery. This is now beginning to happen. The rates of transaction are improving and sellers can now expect to achieve a higher price than would have been attainable in Q2 2012. Many sellers hold off putting their properties on the market for a few more months in the hope that selling prices will rise further.

This creates a gap on the market as buyers start to come forward with ‘’reasonable’’ offers which fail to meet seller expectations most of the time. It is suggested that people looking to sell their property seek advice from a professional property management agency to make sure they are receiving the right kind of offers.

Sales prices are reflective of the available market inventory,and now,each established location or development has positioned itself at a certain level. However, sellers need to be mindful of the fact that buyers are obviously looking to pay a price that allows for capital appreciation in the mid to long-term.

Improved market conditions should translate into an increase in transactions,which will boost sale prices. Sellers must carry out due diligence as there are multiple factors in play, and the absence of due diligence can potentially force a decline in transaction levels.

Dubai Real Estate Tips.

Property sellers are advised to continue carrying out due diligence

Owners must seek professional advice to ensure they sell at the right price

Buyers are also looking to pay price that allows for capital appreciation