Question: I recently relocated to Dubai for work and my employer has rented an apartment for me as part of my package. The tenancy contract is in the company's name and the company pays the rent directly to the landlord, although I'm the person living there with my family.
I'm considering leaving the company for another job. The HR department has told me that if I resign, I may have to leave the apartment almost immediately because the company is technically the tenant. I assumed that because this is our family home and there is still plenty of time remaining on the tenancy contract, we'd be entitled to stay until it expires.
Who actually has the rights in this situation – me or my employer? Michael, Dubai
Answer: This is one of those situations where the person living in a property and the legal tenant aren't necessarily the same person.
If your employer is named as the tenant on both the tenancy agreement and Ejari, then the contractual relationship with the landlord is primarily with the company, not you personally.
Your right to occupy the apartment may therefore come from your employment package rather than from having an independent tenancy relationship with the landlord.
I'd check three things before making any assumptions: the tenancy agreement, the Ejari registration and your employment contract or company housing policy. There may be specific provisions explaining what happens to company-provided accommodation when employment ends.
I wouldn't assume that the remaining term of the tenancy automatically gives your family the right to remain. Equally, however, it doesn't necessarily mean you'll have to move.
If you like the apartment, approach the landlord early. They may be happy to replace the corporate tenancy with a new agreement in your name once the company's obligations have been dealt with.
You're already living in the property and presumably you've looked after it. From the landlord's perspective, retaining a known occupant may be preferable to remarketing the apartment and accepting the risk of a vacancy period.
Just make sure any new arrangement is formally documented. Don't rely on an informal understanding that you can simply “take over” the company's tenancy.
Q: I'm considering buying an off-plan apartment in Dubai and the developer is advertising a “guaranteed 10 per cent return for three years after handover”.
On paper, it looks fantastic. The projected return is considerably higher than I could achieve from a normal long-term rental, and the broker says I don't need to worry about finding tenants because everything will be managed for me.
What I'm struggling to understand is where the 10 per cent actually comes from. If the apartment doesn't generate enough rental income, is the developer legally required to make up the difference? And should I be suspicious when a guaranteed return looks much higher than normal market rent? Daniel, Manchester
A: Whenever somebody uses the word “guaranteed” in an investment proposition, my next question is always: guaranteed by whom, and where exactly is that guarantee written down?
Don't assess the investment on the headline percentage alone.
Ask for the actual rental guarantee agreement and establish which legal entity is responsible for paying you. Is it the developer, management company or another company entirely? A guarantee is ultimately only as strong as the entity standing behind it.
Then establish exactly how the 10 per cent is calculated. Is it based on the original purchase price, the amount you've paid, or another figure? Are service charges, furnishing costs, management fees and maintenance deducted before or after your guaranteed payment?
I'd also want to know whether you're free to occupy or sell the apartment during the guarantee period and what happens to the arrangement if you do. There may be restrictions that aren't obvious from the headline advertisement.
Most importantly, compare the promised income with the property's realistic open-market rental value.
If a Dh2 million apartment would ordinarily rent for Dh120,000 a year, that's a 6 per cent gross yield. Someone promising Dh200,000 every year isn't creating the additional Dh80,000 through magic. There is an economic reason for it somewhere, and you need to understand where the money is coming from.
Sometimes, these schemes are perfectly legitimate and genuinely useful to an investor. In other cases, part of the promised return may effectively have been incorporated into a higher purchase price.
So I'd judge the property first and the guarantee second. Look at comparable prices, realistic rent, location, developer track record and likely resale demand without including the incentive.
Then, ask yourself one simple question: if the guarantee disappeared tomorrow, would I still be happy owning this apartment at the price I'm paying?
If the answer is no, I'd think very carefully before signing anything.
The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to mario@evadxb.com