Dubai Tenancy Renewals Explained: Can Real Estate Agents Legally Demand an Annual Renewal Fee from Tenants?

Many tenants in Dubai are often caught off guard when their real estate agents demand an annual “renewal fee” at the time of extending a tenancy contract. With rising rental costs and increasing scrutiny over tenancy practices, the legality of such charges has become a common point of dispute between tenants, landlords and brokers.

Under Dubai law, the relationship between a landlord and tenant is primarily governed by the tenancy contract, which serves as the legal foundation of the rental arrangement. The law requires that this contract clearly set out the essential details of the leased property, including the purpose of the lease, the duration of the tenancy, the agreed rent, the method of payment and the identity of the property owner where the landlord is not the owner.

This framework is laid down under Law No. 33 of 2008, which amended Law No. 26 of 2007 regulating the relationship between landlords and tenants in the emirate of Dubai. The law makes it clear that the tenancy contract is the principal document defining the rights and obligations of both parties.

In practical terms, this means any fee linked to the continuation or renewal of the tenancy must be expressly mentioned in the agreement if it is to be enforceable. If an annual renewal fee is not included in the tenancy contract, a landlord or agent cannot automatically impose it later as a mandatory charge.

Dubai’s tenancy law also provides that, unless otherwise agreed, tenants are responsible for paying government-imposed fees, charges and taxes connected to the use of the property. These typically include Ejari registration costs or municipality charges where applicable. However, this legal obligation does not extend to private brokerage or renewal commissions unless such charges are specifically agreed upon.

This distinction is important because many tenants confuse government-related fees with broker-imposed service charges. While a one-time brokerage commission at the start of the tenancy is a common market practice, an annual renewal fee is a separate matter and must have a contractual basis.

Tenants should also review any separate brokerage agreement or agency contract signed with the real estate agent at the beginning of the lease. In some cases, agents include clauses entitling them to collect a service fee upon each renewal. If such a clause exists and has been agreed to by the tenant, it may be enforceable as part of the contractual arrangement.

However, if neither the tenancy contract nor any related brokerage agreement mentions an annual renewal fee, the tenant may have valid grounds to challenge the demand. In such situations, tenants can raise the issue with the Dubai Land Department or its regulatory arm, the Real Estate Regulatory Agency, which oversee compliance and disputes involving real estate brokers.

Legal experts say tenants should always read renewal terms carefully and insist on transparency before signing any rental or agency agreement. In Dubai’s regulated rental market, the written contract remains the strongest protection for both sides — and when it comes to annual renewal charges, if it is not in writing, it may not be payable.

 
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