KNOW YOUR RIGHTS: Should you pay agent’s fee on rent renewal?

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The relationship between agents and tenants can get complicated, especially because of the fact that this relationship is tied with financial interests from both sides. A common complaint among tenants is that the agents ask them for fees that simply makes no sense. One of these fees constitutes the agent’s fee upon the renewal of a tenancy contract between the tenant and the landlord.

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The case

In some cases, tenants report repeated nagging and harassment from the part of real estate agents who demand excessive renewal fees when they seek their help in order to renew their contracts with their landlords, which naturally happens without the involvement of an agent. Usually, the agent fees range between AED500 and AED1,000 or 5% of the annual rent. However, some agents try to squeeze out as much as they can from their clients.

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The law

By the law in the UAE, as well as based on the Dubai Land Department’s regulations, agents are entitled to receive a fee when a tenancy contract is signed. There is none clause stating that agents hold the right to continue receiving that fee every time a contract is renewed. However, some agents do include a renewal fee in the contract and if the tenant has unintentionally agreed to that by signing that contract, he is compelled to whatever is stated in this contract and is, therefore, obliged to pay a fee upon renewal.

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The verdict

Real estate agents can receive fees for the assistance they have provided to the landlord in order for him find a new tenant, and for facilitating the renting process between the tenant and the landlord. The agents, however, have no right to claim an additional fee if the contract is renewed between the tenant and the landlord, as this procedure does not require any kind of facilitation from the part of the agent. The law is also clear when it comes to contractual agreements between parties, which is why tenants should either negotiate the terms of the contract or simply refuse to work with an agent who asks them for renewal fees. Tenants could also file a complaint with RERA in case the agent continues asking them for a renewal fee.

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