Real estate agents stated that the fact that some owners or companies write down the rental value of the contracts higher than what is actually collected from the tenants, is an illegal procedure and the perpetrators must be punished because it harms the market, as it harms the national economy as these contracts result in the collection of government fees, and recording them with non-reality values that affect In the revenues of the competent authorities.
In detail, the founder and CEO of Al Rowad Real Estate, Ismail Al Hammadi, said that “the method of changing the rental value agreed upon between the landlord and the tenant in the lease contract, to be less or higher than what is agreed upon in reality, is considered inappropriate behavior in the real estate market and does not serve the interests of the validity of the data Rent, which laid the basis for organizing the rental market and determining the real price of rent in various regions, to preserve the rights of all parties on the one hand and ensure the transparency of the market's performance on the other hand.
Al-Hammadi added that this method can be classified as fraud and its perpetrators must be punished and subjected to legal accountability to deter them and deter everyone who adopts this behavior, in addition to that it is considered as misleading and falsifying the facts and facts of the market in reality, which reflects negatively on the credibility of the rental index and the market involvement in a conflict of conflict in Prices, as a result of some owners reducing the prices of the leased units, following the example of these misleading contracts and consequently the descent of prices.
He pointed out that this kind of misinformation is used by some only to prevent against the law and avoid paying service fees and all other fees withholding from the proportion of the amount of the rent that is paid to the relevant departments, but in reality it is often revealed through the data entered and the process of issuing a certificate is suspended. Rent », which negatively affects the owner.
For his part, the general manager of Awad Gargash Real Estate Company, Dr. Raad Ramadan, said that “these behaviors by some companies and owners or their representatives are present in the market, but they are illegal, because the lease contract entails other fees associated with it, This is a violation. ”
The CEO of "Standard Real Estate" company, Abdul Karim Al Mulla, stressed that "these behaviors are illegal, and they should be avoided in order not to fall into legal problems in the future." He pointed out that the lease contract is linked to government fees, and therefore must be at the same value as the rental checks. The rental allowance, without increasing or decreasing due to the fees.
For his part, said the real estate expert, the managing director of the "Harbor" real estate company, Muhannad Al-Wadi, that "these behaviors may be taken by some companies in order to reduce the real estate fees associated with these contracts, which is illegal."
He pointed out that the contract is the law of the contractors, and that what was written in the lease is what is taken into account during the presence of rental disputes between the parties (the tenant and the owner).
In turn, Sufian Al Salamat, CEO of Somm Real Estate, said that “some companies have resorted to hedging methods during the recent period, which depend on giving tenants low prices, with high prices recorded in lease contracts, in order to hedge against price changes, to prevent tenants from benefiting Of the current rental values, when market prices return to rise, or prevent further declines if prices fall.
He considered that they are “practices that harm the reputation of companies and are misleading of tenants, and tenants must not be subject to them, especially with the presence of alternatives and multiple options in the markets.” He pointed out that “in the long run, these companies lose multiple opportunities, whether to preserve their tenants or to suffer in bringing new tenants.” ».
In the same vein, the director of leasing at "Care" for real estate management, Mohamed Othman Ayoub, said that "owners have preferred to write the rental value in the rental contracts, higher than the real value by about 10 thousand dirhams on average for various and different reasons, all of which are in the interest of the owner in the first place." the first".
He explained that landlords resort to raising the value of rent in contracts, in the context of the hedge due to the existence of expectations and speculation that the rental values may rise again in conjunction with "Expo 2020 Dubai", and this hedging allows the owner to raise the rent with higher rates in the event of that rise.
Ayoub pointed out that some owners see this as achieving an advantage for them, especially for new tenants, which is to maximize the benefit and raise the rent at higher rates to compensate for years of low rents.
He explained that an angel also resorted to that to preserve the market value of the property, in case the owner wants to sell it, which allows him to sell at a higher price, and that an angel believes that it is better in the case of wanting to turn to banks to evaluate the property, if the owner is considering obtaining Other loans from banks.
He noted that landlords compensate the population for agreeing to change the actual value in the contracts, by giving them a longer period in the lease contract, which may reach one month on average, in the framework of encouraging the consumer to accept the contract.
A mechanism to increase rent in the future
The real estate broker, Mustafa Aweidah, considered that codifying rental values for contracts in a way that is not realistic, allows owners to raise rental values more than what is required by the market and the mechanism of supply and demand, especially in the event of a rise in rents with the proximity of the events of Expo 2020 Dubai. He cautioned that this represents misleading and detouring the tenant in order to increase rental values by higher rates.
Awaida pointed out that the real estate market has cycles and depends on several factors, most notably supply and demand, and if the tenants have benefited from the low rents during the past years, then the owners have benefited before that for many years from the high rents.
The real estate broker, Majdi Abdulaziz, pointed out that «the markets witnessed, with correcting rents, some companies that follow these practices and hedge against price fluctuations, and are trying to preserve the returns of the rental values of their buildings for the purpose of selling them at a high price at later times depending on the documented rental contracts, or to benefit Including them in obtaining bank financing.
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The procedure allows the landlord to hedge by raising the rent at higher rates if the prices increase.
- Change the rental value for fraud and inappropriate behavior in the real estate market .