The Dubai Land Department (DLD) launched the unified lease contract for rental properties in Dubai in March this year to create a transparent and professional real estate market with measurable standards. Experts say the new system aims to protect all parties in the lease process and the revisions are seen as an example of best practice.
According to the DLD, brokers legally appointed to manage property of landlords based abroad are no longer allowed to sign unified lease contracts to get an Ejari–the online registration system initiated by the Real Estate Regulatory Agency (RERA) that requires all Dubai rental or lease contracts to be recorded.
The DLD says the property owner must directly sign the original lease contract; even agent who hold a POA to sign a rental contract are no longer allowed to act as proxies. Brokers must now send the unified lease contract via courier to owners who cannot come to Dubai to sign in person.
Only 8 Property Management companies are currently DLD-licensed and allowed to sign contracts and receive payments on behalf of Landlord provided that they have a valid POA document and other necessary documents as required. However, even in this case, they would need a specific authorization.
Among the advantages of this change:
- Tenants are better protected against scams
- Landlord(s) will be more careful choosing who manages their properties.
- Potential decrease in unrecovered security deposits
Of course, there are also disadvantages:
- Possible delays due to the need for courier services for properties owned by remote landlords
- Added bureaucracy (Ejari and DEWA not complete until the original contract is signed and received back)
Going forward, it’s likely that an electronic DocuSign system will be introduced to add security and efficiency to the new process, according to the DLD.
We will continue to keep you informed as any updates to the process are announced.
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