How to negotiate a rent reduction

Most people are aware that rents are falling across the UAE so many of us will be expecting a reduction in our rent at renewal. But what if your landlord hasn’t got the message and doesn’t want to give you a reduction in line with general markets? Here are some hints and tips to try to persuade them.

Should all tenants be looking to negotiate for a lower rent?

You need to see what similar properties are actually renting for before you do anything else as not everyone will be paying above market rates, even with the reductions we have seen in the past couple of years.  Do your research and also bear in mind that a good landlord who maintains a property and fixes problems can be worth a little more.

What are the steps to take?

There are several things a tenant needs to do before approaching their landlord: The first is to check their tenancy agreement and seek how much notice they need to give so they’re not leaving any attempted negotiation to the last minute. This is usually 60 or 90 days but do check your own contract.

As above, do your research and keep links showing rental values for similar properties of the same size in your area. Providing evidence can support your case.

Once you have this information, write to your landlord and politely ask about a rent reduction bearing in mind that honey works better than vinegar and it is always best to stay on good terms.

What if the landlord says no?

Clearly, they have the right to decline but I polite persistence may help. Most sensible landlords, particularly individuals who may be relying on the rent for income or mortgage payments, would rather have a stable tenant than face the prospect of a void period or the expense of refurbishment. Having to find a new tenant is a hassle and cost for them too.

As part of your request for a reduction always point out that you have looked after the property.  Larger landlords, especially institutional ones with large portfolios of properties, may be less willing to negotiate as they probably already factor in void periods  but on the other hand, they may be more realistic than an individual landlord where the decision can be more emotional.

If the landlord refuses to reduce your rent to the market rate you have to decide if you will stay or if you will move to a property with a lower rent. You will need to factor in the cost and hassle of moving as doing so for very small reduction may prove to be a false economy.

What about the RERA calculator? Do we have to stick to the levels on there?

The Real Estate Regulatory Agency (RERA), part of Dubai’s Land Department, has a calculator on its website that is designed to give some guidance regarding rental prices but it is more about giving upper limits and ensuring that tenants are not overcharged or don’t sufferer excessive increases in rent in a rising market.

This applies to Dubai only and there is not a similar calculator in other emirates. It is not a guide to what should be charged and as it is now updated just once a year it can often be rather out of date.

Why are rents falling?

We are seeing a downturn in property prices in many countries and this, plus a combination of factors, will drive rents down. This is not just a UAE issue and all markets have cycles. There are a great many new developments across the UAE and an excess of supply will usually lead to a reduction in prices, the basic economic rules of supply and demand.

Useful information regarding renting in Dubai can be found in this article. It was written some time ago but is still very valid. Need to know – renting in Dubai

I write articles such as this one as part of the holistic personal financial planning service and that I provide to expats, and the general consumer, financial and legal information that I provide in The National newspaper and on Capital Radio UAE. If I can assist you with any personal financial issues, please contact me at keren@holbornassets.com  You will find many other useful articles on this website.

About financialuae

A qualified and experienced Independent Financial Adviser based in Dubai, UAE. Professional and ethical. Freelance writer on personal financial issues & the On Your Side column in The National. Regular radio guest. Senior Partner at Holborn Assets LLC, Dubai, UAE.
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