How to Perform a Landlord Background Check
Renting is one of the popular options for people living in Dubai.
19:19 02 June 2019
In a real estate sale transaction, parties go separate ways after the transaction is finalised. However, in a renting transaction, tenants should understand a lease is a long term business relationship. So, it is important to conduct a thorough check on the landlord.
Here are some of the tips to perform a landlord background check:
- Title search
In Dubai, a landlord is required to own the land the property is located. Therefore, it is very important to verify the title at the Real Estate Regulatory Authority (RERA). This is an agency under the Dubai Land Department (DLD) that control and manages the real estate in Dubai. Most records are online so you can check the status of the ownership of the building. You will also find other information about the landlord such as the identity of ownership, debt service and more.
You should look at the financial information of the landlord before renting. Check the current and prior two years’ operating statements of the property. The landlord should have the financial capability to take care of any repair and maintenance while staying on the property.
- Loan status
It is important to check the loan status of the property you are renting. Does the outstanding loan exceed the market value of the building? You should be alarmed when the loan is upside down meaning when the loan exceeds the market value.
- Escrow account
Before signing a lease, you should establish an escrow account where the landlord will fund for payment involved in the transaction. However, the account should be through a mutually acceptable independent institution.
- Self-help rights
It is very important to have a self-help right closure in the agreement. If the landlord fails to perform certain obligations under the lease, you can set in and handle the issues and offset the cost against rent. Most landlords are very reluctant to grant such rights to tenants.
As the Dubai property market continues to thrive, off plan properties for sale in Dubai are increasing and many renters are now also considering to invest in off plan property in Dubai, such as the District One Residences Meydan & Emaar Beachfront apartments Dubai. This is because off-plan properties are offered at lower prices and come with friendly payment terms.
But if you're planning to rent right now instead of investing, make sure you perform a thorough landlord check to avoid any inconveniences.