Dubai caps rent increase at 7pc
DUBAI — Jan 02:Dubai yesterday set a cap of 7 per cent on rent increases for 2007 with a view to curbing galloping rents that have been feeding inflation in the emirate. His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, in his capacity as Ruler of Dubai, has issued a decree on rent allowance in Dubai.
The new rent allowance was decided after taking into consideration Decree No. 2 of 1993 and its amendments, which set up a special committee to look into and settle disputes between landlords and tenants, and Decree No. 14 of 2005, which set a ceiling for any rent increase in the emirate.
As per the new decree, the rent allowance shall not exceed 7 per cent of the annual rent charge of the property. This will apply to all rent contracts to be renewed in 2007 on the condition that no rent increment was made on that property in 2006.
No rent allowance shall also be increased in 2007 on properties whose contract had already been signed in 2006 with a new tenant, Article 2 of the new decree says.
The new decree takes effect from the date of its issuance, January 1, 2007, and is to be published in the Official Gazette.
The decision has been widely hailed by Dubai residents, who say it is nothing less than a boon for the thousands of middle class families. A recent poll had suggested that 44 per cent of the people in the country spent more than half of their salaries on rent.
Asgar Hussain, a resident of Jebel Ali, considers it a landmark decision. “I was personally under a lot of stress after the 15 per cent rent cap ended on December 31. We were expecting a sudden and massive jump in rents anytime. But this is the best New Year gift that the government could have given us,” he gushes.
Kundan Singh, an employee with ABN Amro Bank, agrees the new decree will go a long way in checking inflation. “It’s a fantastic news for the middle class families like us,” he emphasises.
However, a cross section of people Khaleej Times spoke to were still apprehensive that some landlords may still hike rents, giving the law a go-by.
Officials, on the other hand, dismiss such fears. Talking to Khaleej Times, an official at the Rent Committee in Dubai Municipality said they would ensure landlords did not hike rents as per their whims and fancies. “We’ll see to it that they (landlords) abide by the new decree,” he asserted.
Landlords, meanwhile, do not seem to be happy about the decision. Says Aamir Ahsan Alam, who rents several apartments in Bur Dubai and Deira areas: “The 7 per cent cap will affect us badly,” he points out.
It may be mentioned that Abu Dhabi had also decided to limit residential and commercial rent rises to 7 per cent a year. (With inputs from Agencies)
Second phase of health insurance comes into effect
ABU DHABI — Jan 02: The second phase of the health insurance policy came into effect yesterday.
It is to benefit about 1.5 million expatriates working in the capital.
As per the law issued by the President, His Highness Shaikh Khalifa bin Zayed Al Nahyan, employers will be responsible for providing health insurance to an employee and his direct family, including wife and three children below 18 years of age.
The law aims to ensure quality and cost-effective health care services and medication for expatriates living in the emirate.
The Health Insurance Scheme is one of the most important projects introduced by the Abu Dhabi government and aims to offer accessible and affordable health services to Abu Dhabi residents.
The General Health Authority for the Emirate of Abu Dhabi (GAHS) is the sole official regulatory body for implementing the project.
The scheme is temporarily approved for holders of valid health cards issued by the GAHS or individuals covered by insurance programmes other than the one provided by the GAHS before January 1 until the expiry of the card.
Health insurance policies that have been issued will be valid for one year and must be renewed annually, and all authorised insurance companies may not refrain from extending health insurance coverage to any individual or company for any reason.
The Phase I of the project was implemented on July 1 last year and was confined to companies sponsoring more than 1000 employees.
The National Health Insurance Company, Daman, has set up four branches to facilitate transactions for the new scheme.
The branches are located in the Bateen Area (next to the Central Bank), the Musaffah area (opposite the Abu Dhabi Islamic Bank), Al Ain (the Al Ain Post Office Building) and Madinat Zayed - Western Region.
To further facilitate the process, Daman has set up additional Service Points at the Department of Preventive Medicine Facilities located in Abu Dhabi Island, Al Ain City and Madinat Zayed.
These facilities will provide services for certain categories including housemaids, nannies, drivers, taxi and other transportation drivers, maintenance workers, agricultural workers, security guards, cleaners, helpers, in addition to residents not permitted to work (individuals sponsored by their family members such as parents, children and spouse).
Villas divided on demand
DUBAI — Jan 02: Several real estate agents in Dubai are illegally partitioning villas into small units to rent them out to a large number of people.
Such arrangements are apparently in great demand in areas like Hor Al Anz, Qusais and Al Quoz as an increasing number of expatriates belonging to middle and low income groups are forced to live in difficult and unsafe conditions to save some money, sources in the real estate market say.
Several unscrupulous real estate agents illegally sublet villas to 15 to 20 families by setting up unsafe wooden partitions, sources say.
Engineer Walid Abdul Karim of the Building Inspection Department of Dubai Municipality says, “We are aware of the fact that one room of a villa gets divided into two or three parts. This is illegal.”
”The municipality has served notices to quite a few of them so far. We have asked them to remove the partitions immediately. If they continue to violate laws, the municipality will issue letters to the Dubai Electricity and Water Authority (Dewa) to disconnect power and water supply,” he adds.
An agent subletting villas in Hor Al Anz says, “Although we do not issue tenancy contracts to individual tenants, if necessary, we can give our tenants contract letters stating the rent amount and that one month’s notice should be given by both parties before vacating the premises.”
The agent who claims to work along with a group of people for a reputed real estate company in Bur Dubai adds that there is a big demand for studios and one-bedroom units from families who are unable to afford apartments with proper facilities in residential buildings.
”We cater to this segment and therefore use partitions to meet their needs. It also depends on the size of the family,” he says. “We also create temporary rooms in the open compound areas in villas to accommodate more families.”
Shafar, another agent, says a one-room unit with a small kitchen and bathroom is available for Dh2,000 to Dh3,000 per month and a family can actually live comfortably in them.
Several families residing in such villas, however, complain that they are harassed by agents. They say though they dish out a huge amount, agents and villa owners refuse to provide any maintenance service. “My toilet has no light for several months now because the agent refuses to provide the electrical connection to the toilet,” says Joseph, a tenant living with his family in one of the villas in Hor Al Anz.
He adds that there are no proper drainage facilities in these makeshift rooms. “I am constantly worried about the health of my wife and child.”
”We have no choice but to live in such unhealthy conditions because of the rent. Imagine 20 to 25 families living in a villa which has around six to seven rooms,” says a Sri Lankan tenant who has been living with her family in a makeshift room. “During summer, these plywood partitions get unbearably hot and there is no privacy.”
“Besides, the meter reading is erratic and we end up paying huge amounts for electricity. But we do not know what to do and who to complain to. Because, if we lodge complaints with the Dewa, the agents will throw us out.”
Abra users not disturbed by recent fare increase
DUBAI — Jan 02: The increase in fare for Abra services between Bur Dubai and Deira has not come as a surprise to the thousands of people who use it every day. It was on the cards, they say. Abra drivers were talking about it for quite some time.
Despite the hike, Abra continues to be the cheapest mode of travel between Bur Dubai and Deira.
“There is absolutely nothing to get panicky,” asserts R. Shridharan, an employee with ABN Amro Bank. “I have been using Abra for six years now. This is still the cheapest travel and takes the least time,” he adds.
S. John, a small-time businessman, feels even if the fare had been increased by Dh5, it would have been okay, considering the short time the travel takes. “You can reach Bur Dubai or Deira in just eight-nine minutes. It saves you the blues of those traffic snarls,” he points out.
For the Abra drivers, the hike comes as a much-needed relief. “We welcome the decision. The cost of diesel has gone up and 50 fils was hardly enough,” says Mohammed Wasim, an Abra driver. However, he quickly adds: “But the fare should have been hiked by at least Dh2. The fare should be reviewed every year.”
Dubai Executive Council has recently announced an increase in fare of Abra ride from 50fils to Dh1. Those wanting to hire a boat for an hour, will now have to shell out Dh100, instead of Dh50. The new rates will become effective within a week.
Some 60,000 people use Abra services every day. On the holidays, this figure touches 100,000.
Two-fold rise in income expected
DUBAI — Jan 02: Recent hike in fees for Abra users from 50 fils to Dh1, and the use of Abra shelters for commercial advertisements will help double the revenues for Abra owners and operators. The new alternatives aims to increase the revenues from Dh70,881 to more than Dh141,000 for Abra owners.
Engineer Issa Abdulrahman Al Dossari, CEO of Marine Transport Department at the Roads and Transport Authority (RTA), said, RTA has set up a strategic plan to develop the marine transport system in the emirate with the costs exceeding Dh1 billion. This includes the development of a marine transport system in Dubai Creek.
The plan has been prepared after exploring the views of Abra owners which include 149 low-income UAE nationals and 300 of Abra operators and examining all aspects of their trade. The plan will be implemented in stages according to a timetable that aims to ensure quick, safe and integrated marine transport system, Al Dossari noted.
The RTA has also allocated a staff group to supervise the process of Abra registration and licence representative by in-land Water Transport Department and also train the staff to service the users and operators of the Abra focused on three main topics which are the security and safety reasons, the use of facilities and customer service.
Technical systems and programmes have been introduced to simplify the procedures for operators and owners, including the issuance of licences, follow-up to operation obstacles, emergency maintenance and licensing periodic maintenance in addition to prepare studies to improve and develop the service and measuring the customer satisfaction, he disclosed.
Al Dossari said that the Authority aims to develop the marine transport services through using other transport means such as the water bus, water taxi and boats for group transport and ensure the integration with other transport services such as the metro, buses and taxis.
The RTA has started the implementation of the first step to achieve the integration and interdependence between the various means and transport patterns in the emirate through linking the bus transport line No. 19 to Al Seef Abra Station to ensure comfortable transport for the Abra users. Pointing out, he said that the distance between the Public Buses and Al Seef Abra station would not take more than a minute by walking and person can transfer through the line No. 3 to Baniyas Station opposite Dubai Municipality in three minutes only.
Al Dossari added that the RTA had provided six centres for customer service along the two shores of Dubai Creek, in addition to the main centre in the RTA building.