Renewal transaction can often get done without a broker
One thing consumers often ask about is the agent renewal fee, charged upon the renewal of a tenancy contract between the tenant and landlord. We outline when it needs to be paid and when it doesn’t.
The case
Typically, agent fees range around 4-5% of your annual rent. When your lease is up for renewal, your agent may send you a reminder and offer their help in facilitating the renewal process between you and the landlord. You may be hesitant to pay another 5% of your annual rent, but the good news is that the renewal transaction can often get done without a broker or the associated fee.
Your rights
By UAE law, as well as Dubai Land Department regulations, agents are entitled to receive a fee when a tenancy contract is signed. But there is no clause stating that agents hold the right to continue receiving that fee every time a tenant’s contract is renewed. However, some rental contracts will include a renewal fee stipulation and, if the tenant has signed that contract, they are legally bound to honour it. The lesson? Read your contract carefully to avoid this unnecessary fee.
The verdict
Real estate agents receive fees for the assistance they have provided to the landlord in order for him to find a new tenant, and for facilitating the renting process between the tenant and the landlord. However, if the contract is renewed between the tenant and the landlord, this procedure does not require facilitation from the agent and, therefore, there is no claim for an additional fee. The law is also clear when it comes to contractual agreements between parties, which is why tenants should negotiate the terms of the contract before signing. If an agent insists on charging a renewal fee without prior agreement, tenants can file a complaint with RERA.
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