A “black” real estate market for dividing villas and apartments… raises rents by 40%

Unlicensed real estate brokers, working illegally, have caused the spread of irregular residential units (subletting), rising housing prices, and harming the real estate market in general, in clear defiance of the laws and regulations for regulating real estate and residential units, as they form groups that work together in order to achieve the highest possible profit, and they are the beneficiary first of that, then the property owner.

According to residents in various areas in Abu Dhabi and Al Ain, the return of the phenomenon of informal housing has caused rents to rise by about 40% above their actual value.

Residents confirmed to “Emirates Today” that illegal brokers have created a black real estate market, pointing out that they control certain areas and set prices in them that are not proportional to the market value of the property. This was helped by the lack of supply in the market currently and the owners resorting to subcontracting with them to achieve greater profits in exchange for allowing them to re-rent Al Ain after dividing it into rooms, small bathrooms and kitchens within the same room (a sink and a small cupboard hanging on the wall).

Muhammad Shehata said: “I live in the Manaseer area in Abu Dhabi, and the company that manages the property warned me to vacate two months before the end of my contract, and throughout this period I tried to find alternative housing in the area, but I was surprised that many of the buildings that were under renovation were converted into independent rooms, to be rented to a larger number of residents, and instead of six families living in the three-story building, where the floor includes two apartments, one floor was transformed into six independent rooms, with a family or group living in each room. “of single people,” indicating that he contacted the company again to urge it to renew the contract, and it agreed to do so on the condition that the rent be increased from 55 thousand dirhams annually to 80 thousand.

Revoke privacy

Walaa Saad indicated that she was looking for a one-room apartment and contacted brokers, and she was surprised that all the apartments offered were in irregular villas in the Al Mushrif area, and that the rent for the apartment (a room and a hall) ranged between 5,000 and 6,000 dirhams per month.

As a result of the random division, I noticed that the partitions between the apartments are made of plaster and very thin, so as not to take up any space, which eliminates the idea of ​​privacy between residents.

Residents in the cities of Khalifa and Mohammed bin Zayed confirmed the return of the phenomenon of dividing villas, and that a large number of villas have become a refuge for single people of all nationalities, noting that the area, which was characterized by calm and tranquility, has become densely populated.

Butti Abdul Rahman, Yousef Hussein, Mansour Al Balushi, Hashim Matar, and Talal Ismail confirmed that the division of villas is a phenomenon created by the tampering of real estate brokers in many areas of the country after it became a source of great profit for them, which requires the intervention of the concerned authorities to prevent these illegal brokers, especially since the division has many social and health harms to society, including a lack of respect for the neighbor’s privacy, and putting pressure on the infrastructure and services related to water, electricity, and parking, in addition to Overcrowding may cause the spread of diseases, calling for the imposition of severe penalties on landlords and tenants who violate the law by dividing villas.

Residents in the city of Al Ain, especially the old residential areas, also noticed the division of public housing and villas into several units, with the aim of renting them to the largest possible number, and without a documented rental contract, noting that this matter causes a large crowding of single people in the residential unit, in addition to increasing the loads of electricity and appliances on the dwelling, which may cause problems and the occurrence of fires.

Omar Bakhit, an official in real estate leasing companies, pointed out that the main purpose of renting villas after redividing them and subliminating them under undocumented contracts is to exploit the crisis of the current limited supply of regular apartments to achieve the highest amount of profit, pointing out that the villa is rented under a regular contract for an amount ranging between 150 thousand dirhams and 180 thousand dirhams depending on its area and number of rooms. If it is divided and rented to more than one family, it will achieve a return exceeding 350 thousand dirhams annually.

Violation by landlord and tenant

The legal advisor, Dr. Youssef Al-Sharif, explained that the phenomenon of irregular housing and the division of residential villas is a legal violation in the Emirate of Abu Dhabi and is faced by local legislation, especially the law regulating the occupancy of real estate and residential units. This law applies to all real estate and residential units in the emirate, and its application extends to the owner, tenant, and occupant alike, as the law prohibits group housing in units other than those licensed for that.

He said that the law imposes administrative fines for various forms of violations, including: occupying, renting, or exploiting the property in an illegal manner, from 50,000 dirhams to 100,000 dirhams or more in the event of repetition, and renting the property as group housing (such as dividing an unlicensed villa) from 100,000 dirhams to 200,000 dirhams when the violation is repeated within a year.

According to the Abu Dhabi Real Estate Sector Regulatory Law, practicing real estate brokerage without a license is considered a crime punishable by imprisonment for a period of up to six months and/or a fine of 50,000 dirhams to 200,000 dirhams, and this applies to the unlicensed broker who facilitates such practices.

He pointed out that the penalty for these practices falls on both the unlicensed broker/intermediary, and they are criminally and civilly liable. The tenant who carries out unauthorized subdivision or partial leasing is also directly responsible for violating the occupancy of the property, and large administrative fines may be imposed on him, and he may be subjected to compensatory judicial procedures or eviction. The owner of the villa or property is considered responsible if he knew about, participated in, or did not take measures to prevent the violation, such as not informing the competent authorities.

Judicial control powers

Lawyer Hadiya Hammad placed the responsibility for dividing residential villas into units, rooms, or studios and renting them without a license from the competent authorities, or using them for purposes other than their intended purpose, primarily on the property owner, as he is the owner of the right to dispose of the property, and is responsible for ensuring compliance with planning and residential requirements and registering rental contracts with the municipality. She said: “The owner will be punished with financial fines, and the violation will be removed, and the matter may come to the evacuation or closure of the property, with the costs of correcting the situation being charged to him.”

She explained that legal responsibility extends to the real estate broker if it is proven that he is practicing the activity without a license, or that he is mediating, advertising, or renting irregular units.

This is considered a violation of the practice of the real estate brokerage profession, and exposes him to accountability, fines, and administrative penalties.

She stated that the municipality has judicial control powers and takes immediate action against violators without the need to wait for complaints.

Loss of money

Lawyer Salem Obaid Al Naqbi stressed that the phenomenon of dividing villas and turning them into informal housing does not only represent a regulatory violation, but rather affects the essence of the quality of life that Abu Dhabi has been keen to establish, as random division puts pressure on the infrastructure and poses a real danger to public safety, and disturbs the social balance within residential neighborhoods, stressing that local laws in the Emirate of Abu Dhabi are decisive in this regard.

He said: “If the competent authorities intervene and vacate the property due to its violation of housing laws, the tenant finds himself facing a harsh reality. In many cases, he is not entitled to demand a refund of the amounts he paid, because the contract is fundamentally in violation of the law as if it did not exist. However, the judiciary may look with a different eye if it is proven that the tenant was a victim of deception or misleading by the property owner or the broker, which is a matter that the court assesses according to the evidence and circumstances.”

The Department of Municipalities and Transport repeated its warnings about the dangers of overcrowding, which include fires, the spread of diseases, and poor ventilation, in addition to being a violation that carries a fine of 50,000 dirhams, while the fine for non-compliance with health and hygiene standards is 25,000 dirhams.

The department is implementing the “Your Housing is Your Responsibility” campaign to reduce the phenomenon of overcrowding and its negative effects, in conjunction with its intensification of field inspection campaigns.

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Inspection campaigns

The municipality confirmed its work to ensure compliance with the implementation of the law regulating the occupancy of real estate and residential units, through intensive inspection campaigns on violating real estate and residential units, to confront the phenomenon of population overcrowding and to implement administrative penalties and fines that range between 5,000 dirhams and half a million dirhams.

In the event of a repeated violation, fines amounting to one million dirhams will be imposed, and violators are subject to additional penalties, including the impoundment of unregistered vehicles, due to illegal parking in residential areas specified within the “parking” system.

The department indicated that it reserves the right to take any additional measures as necessary, including suspending “Tawtheeq” contracts and accounts for violating owners and investors.

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Proactive oversight

The legal advisor, Dr. Youssef Al-Sharif, stressed that confronting the phenomenon of informal housing does not succeed through legal procedures alone, but rather requires a comprehensive societal approach that combines deterrence, prevention, and shared responsibility, indicating that eliminating it in practice can be achieved through 12 axes, which include moving from “control after the violation” to prior prevention through proactive control of real estate advertisements on digital platforms and means of communication, linking them to the database of licensed brokers, and preventing the delivery of services (electricity, water, and the Internet) to any unapproved internal division, Slum housing cannot exist without services, and electronic connectivity between municipalities, utility companies, and police agencies to monitor residential crowding early.

The topics included “deterrence with transparency” by publishing the names of violating offices and brokers and stopping their activity publicly, criminalizing advertising and promotion of unlicensed units, not just renting them, allocating a reward to those who report unlicensed brokers as a societal incentive, directing awareness campaigns in simple language explaining to the tenant that cheap rent today may cost you a loss tomorrow, and addressing the social root and not the phenomenon, because slum housing is not just a violation, but rather the result of the high cost of regular housing. For middle- and low-income groups, the lack of appropriate legal options, encouraging licensed shared housing models (Co-living) with clear standards, motivating investors to develop small legal units with fees and facilities, engaging the private sector in realistic housing solutions, in addition to engaging the local community and enabling residents to report without fear.