Out of the box

“Holidays” .. an investment option governed by regulated laws

Ismail Al Hammadi

December 28, 2021

Recently, there is a lot of talk about “vacation homes” as another option for operating residential units in light of the sluggish demand for rents, and the increasing number of ready-made units in the market.

According to market information, the number of "vacation homes" units in Dubai has increased nearly six times in five years, from 1,641 units in 2015 to more than 4,700 in 2018, and more than 9,900 units in 2020, to enter "holiday homes". Hospitality sector, as another type for tourists with apartments and hotel rooms.

Here, it is very normal in the market, as an alternative investment option for owners, to benefit from their units, but to promote this matter as the best option available in the market for investment, and to give false notions to owners about this trend, it is unnatural if it is true.. Not everything that is available is permissible.

To transform your real estate unit as an owner into a holiday home, there are several conditions and criteria set by three main laws: Decree No. (41/2013) regulating the rental of “vacation homes” in Dubai, and Executive Council Resolution No. (49/2014) regarding fees and fines related to the activity of Renting “vacation homes” in Dubai, and Administrative Decision No. (1/2020) regarding the issuance of the executive regulations of Decree No. (41/2013), which clarifies the regulatory legislation, technical requirements and guidelines for “vacation home” operators and owners wishing to obtain a license to convert their units into homes It was issued in the form of a 35-page guide.

And for everyone who wants to enter the field of “vacation homes”, I advise him to review and review these laws, and not to make an improvised decision, based on loud voices on social media platforms, so as not to fall victim to legal violations, and to guarantee his full rights in light of the legislation that frames the “Bayut” sector. Holidays".

The first thing that you need to know as a real estate unit owner, is that “vacation homes” is a system that falls under the umbrella of the Department of Economy and Tourism, which in turn adopts special requirements and criteria for converting your residential unit into a vacation home, and you must also know that there are companies licensed to engage in this activity, and the owner cannot The unit converted into a vacation home and rented out without a contract with one of these companies.

It should also be noted that there are approved classifications of vacation homes (luxury and tourist), and each classification has terms and criteria for its operation and licensing.

I will not go into much of the laws related to this, but I just want to draw the attention of the owners to this aspect, which I see is taking a wrong path due to some advice issued by not knowing enough about the law regulating this direction, and without full knowledge of the real estate market.

Yes.. "Holidays" is a new investment option in the real estate market, and it may be a rewarding option in light of the increasing number of tourists and the diversity of their exporting markets, but it is not possible to neglect other aspects that may put you as a real estate owner in situations that are completely opposite to your expectations, and on another clarifying point. O owner, you should know that the “vacation homes” sector is also subject to the provisions of Decree No. (13/2011) regulating the conduct of economic activities in Dubai, and it has its own conditions and standards.

Therefore, be wary of what you hear, and research carefully to make the right decision to convert your condominium into a vacation home, and whether it is convertible or not according to the required standards.

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