Dubai’s flourishing real estate market is on an upward trajectory, known for highly lucrative rental yields, luxurious lifestyles and infrastructure; it has become a polarization center for investors from all around the world, leading to an increase in the demand for professional property management services.

Property managements are regulated in Dubai, as it is essential to ensure the protection of both landlords and tenants. The regulation of such systems falls under the jurisdiction of the DLD (Dubai Land Department) and RERA (Real Estate Regulatory Agency), these authorities ensure the compliance of all real estate professionals, including property managing entities, with legal standards and ethical boundaries.

Gatekeeping: Property Management Regulation in Dubai

According to the Real Estate Legislation of Dubai, issued in 2019, “A management entity is an entity in charge of managing Common Facilities, Jointly Owned Real Property, or Common Parts in accordance with the provisions of this Law. This includes Developers, Management Companies, or Hotel Project Management Companies, as the case May be”.

Based on the definition, property managers take care of properties, whether residential, industrial by a third-party contractor, or commercial properties, minimize vacant properties, look after the owners’ investments by maximizing their returns of investments, they are also responsible for maintaining the status of the property, regularly assessing the property through inspection, preserving the value and appeal.

Does Property Management Require a License?

The main responsibility for property managers is taking care of the property on behalf of the owner, keeping it intact while ensuring tenants’ on-time rent payments, and abiding by the evolving regulations. Such an act cannot be randomly performed by anyone who wishes to get the job done.

UAE’s Real Estate Regulatory Agency (RERA) regulates property management and enforces licensing on their activities, prior to initiating any contract with any property owner.

Article 5 of Law No. (4) of 2019 Concerning the Real Estate Regulatory Agency -definitions’ section- states that one of the RERA’s functions is to “regulate and license Real Property Activities, and audit and monitor the persons conducting these activities to ensure their compliance with the legislation regulating the Real Property sector”; RERA certifies property management entities to operate according to contractual and legal terms, it also provides regulatory training courses for appliers.

Hence, property managers should register with RERA with Trakheesi system and then obtain the professional practice cards, acquiring eligibility for commencing activities.

What are the Duties of Property Managers?

Property managers are often hired due to the unavailability of property owners to manage their own property, or having multiple possessions, or having resided outside of the property’s location, owners wish to have peace of mind and handover duties to experts who are willing to look after the property with utmost care, thus the management duties can be listed as follows:

• Doing what’s in the best interest of the landlord when it comes to probing new tenants and screening prospect ones -as in performing due diligence procedures to verify tenants’ identities- to make sure they are well-qualified for preserving the value of the property and handing payments on time.
• Handling leases with tenants: tenancy contracts, maintenance fees, and service charges. Checking for repairs and scheduling them. Property managers are also required to set and collect the rent fee as well as renew the leasing contracts.
• Legal compliance: property managers should always ensure the application of tenancy regulating laws among tenants and their landlords and stay updated on the norms.
• Financial reporting: keeping all documents in check and ready for discussion with the property owner.

Such duties may alter based on the amount of payment, the size and type of the property, and the responsibilities mentioned in the contract.

Perks of Having Property Management:

Property managers’ activities are often time and effort saving for owners, the benefits can be numerous and listed as follows:

• Advanced Tenant Screening: this due diligence procedure ensures the occupation of reliable and financially capable tenants only, which results in a risk reduction when it comes to late payments, property damage, and cases of eviction.
• Legal Compliance: The property is regularly checked for compliance with local laws, including tenancy and municipality regulations, contracts are also properly managed along with notices and legal proceedings. Such compliance offers legal safety for both parties.
• Efficient Rent Collection and Repairs Management: property management entities ensure the timely and well-handled rent collection, while being a point of contact between the tenant and the owner, providing effective communication channels and dispute handling; as well as checking for repairs and scheduling maintenance dates with trusted service providers.
• Conserve Long-Term Property Value: the execution of proactive maintenance and regular check-ups protect the investment; consequently, the value is kept in good condition for resale and new leasing contracts.

What if We Hire a Non-Licensed Property Manager?

Property owners ought to check for the verification of the legitimate licensing of property management entities, through checking the validity of the license by typing in the sequenced number on the Dubai Rest application, if this process is overlooked and a non-licensed manager was hired, then:

• Both parties of the contract -as in both the owner and the alleged property manager- would be subject to legal penalties, such as fines under the local law.
• Lack of legal background and standing leads to lack of accountability, which creates more opportunities for embezzlement or fraud due to the absence of proper procedures.
• Defective tenant management systems: non-licensed managers would perform ineffective customer screening as they have no knowledge of proper due diligence procedures, and poor legal knowledge may affect property’s state and may result in the issuance of unlawful eviction procedures.
• Reputation damage: tenants may view the property as being unprofessional or unsafe, poor management history negatively impacts leasing and selling rates within a property.
• No insurance coverage: if issues arise, non-licensed property managers are not held accountable in court for loss coverage.

Final Thoughts

The original law creation was dated in 1754 BC, known as “Code of Hammurabi; These early legal systems were created to establish order, regulate society, and resolve disputes”. Even if times have changed and societies have advanced, rules and regulations are indispensable for proper interactions among people, especially when providing services. Upon abiding to the laws governing relations between property owners and the managers, each party secures their rights and ensures legal protection in case of any misdemeanour.

To sum up, we are inhabitants of a world currently lead by digital platforms, overcrowded with scammers and fraud attempts, this upraises the quest for applying proper due diligence on tenants to verify their identity and do background checks, in other terms screening them and checking for any previous criminal commission, thus paving the safe route for selling or leasing a property to someone with a clean history and legal source of income.

If you’re an occupied property owner looking to simplify your property management, we can  help with referring property management companies to match your needs.  

Disclaimer: The content on this page is for general information purposes only and does not constitute as legal advice nor should it be used as a basis for any specific action or decision. Nothing on this page or website is to be considered as rendering of legal advice or legal services for any specific matter. Users of this website are advised to seek specific legal advice by contacting a lawyer regarding any specific legal issues.