Sharjah - Tenants in residential units in Sharjah said that real estate companies have reduced rental values, but register them in contracts with a value greater than the actual paid, which they considered as a detour of companies on the indicators of price correction, and rentals in the markets.
They pointed out that some companies consider the reductions as a temporary offer, and some document this with additional items, so as not to require the tenant to continue the rental reductions during the following years.
For their part, two real estate experts considered that the registration of some companies higher values in the contracts, due to investment reasons, whether related to the maintenance of high values of the property, or to obtain bank financing, in addition to some resort to the speed of housing units, while not committing to low prices For long-term rentals, differences are often limited in value.
For its part, considered the representative of the real estate sector in the Sharjah Chamber of Commerce and Industry, that these practices are subject to acceptance or rejection of tenants, demanding not to comply with these conditions from companies, because the contracts are binding on them.
New building
In detail, the tenant Samer Saad said that after agreeing with the management of a new building, he moved to it at a reasonable price for rental fees in the market during the current period, and at a price of 27 thousand dirhams per year for a room-class apartment and a lounge, was surprised that the company put the price of 32 thousand dirhams on the lease When asked why, the company's employees told him that he was committed to the agreed price, and that the contract is for internal affairs of the company, considering that this is a circumvention of companies on the leases in the markets, and not to commit to such reductions when renewing contracts.
The tenant, Mohammed Abdullah, added that the real estate company that manages his building agreed with him on a low price for rent, provided that the lease is written at a higher price, with the promise of commitment to the price paid during the year following the rent, which forced him to accept the value difference between the amount paid and the actual contract.
The tenant, Mustafa Ismail, said that he was surprised after the rents fell in the markets, according to price correction operations, that a real estate company offers to rent an apartment at a low price as an offer during the first year, with a free month, while the lease will write down the value of different, so companies try to escape from Discounts granted to tenants, although in previous periods they benefited from significant rental increases, which were borne by tenants.
Individual cases
In turn, the director of «Walid Real Estate», Mohammed Turki, that «the resort of some real estate companies, which put prices higher than the actual value of rents on contracts, due to investment reasons, to deliberately show that their buildings record high income levels, which increases These companies are individual cases in the market, and are often weak in the management structure, because it is assumed that there are similar auditors to large organized companies, and they can object to these price differences between contracts and income Actual rents .
He added that «tenants are supposed to reject these practices, because the contracts are binding once the parties agree and sign, and therefore have the right to claim these companies in later periods at the same price documented contracts, even if the levels of rents in the region lower than that».
Lease contracts
For his part, said the director of «W Capital Group», Walid Zarouni, that «some companies resort to write a higher price of leases than the actual paid, as a hedge in two areas: First, is to maintain high investment value by documenting the entry of high rents on contracts, The second area is the hedge against continuing to commit to low prices with tenants, in anticipation of the rise in prices later, so they have the right to increase fees similar to what is documented contracts ».
He pointed out that «these companies exploit the policies of satisfaction and acceptance by tenants, who accept these conditions in return for low rents, and often in new buildings, but at the same time they are obliged to the value signed by them legally».
For his part, Chairman of the Real Estate Sector Representation Committee at the Sharjah Chamber of Commerce and Industry and Chairman of Alghanim Real Estate Company, Saeed Ghanem Al Suwaidi, said that «some real estate companies resort to document prices of contracts higher than the actual value they collect from tenants, because of the expectation of companies or owners of increases "In the following year, they are charging these prices in a way that they can ask tenants for increases at the right time, especially if the rents are low at the time of signing the contracts."
He added that «some companies resort to these contracts of fictitious value to show that their buildings are high income, and therefore can be sold at a high price to others, and can be taken bank loans based on the values documented contracts, which banks review when assessing loans required».
He explained that «tenants should reject these practices, because the companies can impose them only by mutual consent with the presence of market options, and because the contracts are binding on the parties when signed».
"Companies resort to these contracts to show that their buildings are high income."
"These companies are individual cases in the markets and weak in their management structure."
Responsibility of the tenants
The real estate broker, Mohammed Abdul Salam, that «the responsibility of the tenants who accept to pay rents other than less than documented in the contracts, and therefore it is important to have sufficient awareness to know that the terms and conditions they sign in the leases is an acceptance of the responsibility they bear for those Terms.
Traders described these contracts as a detour of companies on price correction indicators.