Dubai: Not everyone in Dubai’s property market is thrilled about landlords offering short-term rentals. The residents at the Oceana on the Palm definitely aren’t.

The Owners Association (OA) at the recent annual general meeting set penalties on any owner allowing his unit to be leased on a short-term basis.

Unlike at other communities, the contractual documentation at Oceana does not allow the leasing of a unit for any duration “less than 12 months” and only then as a single-family residence. The contracts specifically notes that none of the homes should be put up as “holiday homes” or for “short-term rentals”.

Failure to do so will see the concerned property owner being hit with a penalty of Dh10,000 in the first instance, Dh50,000 for a repeat, and no access cards being provided for these transient visitors to access the common facilities.

The Owners Association has been tasked with enforcing these obligations as they do not want shortterm visitors. Many had bought at the development exactly because of this.

– John Stevens | Managing Director at Asteco

As for those at Oceana, “The Owners Association has been tasked with enforcing these obligations as they do not want short-term visitors in their community,” said John Stevens, Managing Director at Asteco. “Many had bought at the development exactly because of this provision in their SPA (sales and purchase agreement).” The Oceana currently has a 95 per cent occupancy, with 60 per cent plus being owner-occupiers.)

It is learnt that owners associations at some of the other towers in Dubai are also in two minds about homes being rented out for durations anywhere from a day to a few weeks. They need to make up their minds either way because the short-term rental phenomenon has caught on, and property owners do not want to miss out on any chance to generate returns from their unit. More so, as the market for yearly rentals is still under extreme duress, with rates continuing to drop across the city.

Oceana’s homeowners have sought clarification from the local authorities, in this case Dubai Tourism and Commerce Marketing (DTCM), which is the entity licensing and regulating short-term rentals. According to sources, DTCM’s stance is that given that it is the licensing authority — giving landlords the right to lease short-term — this overrides any OA directives which is what the Owners in Oceana who bought units there specifically because short-term rentals were prohibited is fighting.

According to Stevens, “Everyone understands the benefits offering units on a short-term basis bring to owners and the economy. But these must not overrule those legal documents that every homeowner has signed committing them not to do short-term rents. This will continue to be challenged by Oceana’s Residential Owners Association.” (Asteco is operating as “association managers”.)

It is uncomfortable to have shortterm residents as neighbours, you just don’t know who they are, or our rules or facilities in the same way as those of us who see it as home.

– Marc Haberland | Board member, Oceana Residences

There is no arguing that holiday homes and short-term stays open up more options for property owners/investors in Dubai. Multiple property booking sites have opened up, hoping to do what Airbnb managed on a global scale. More landlords too are willing to give the concept a try, prompted by the sharp drop in rents for full-year leases over the last two years.

But dealing with owners associations needn’t be a smooth ride. Vinayak Mahtani, CEO of bnbme, said: “We understand owners associations in several cases don’t like units to be put up on the short-term market. We work with OAs and (their) board members to understand better what their concerns are and then market out properties accordingly. It is normal that a family building would not like to have five bachelors partying at the pool with music played extra loud.”

Mahtani reckons there are ways to avoid such hassles. The homeowner needs to bring in a property management company and have parameters in place to screen guests.

“Owner associations should also start to vet companies and limit the number allowed to manage in their building,” he added. “Have a tendering process where the property management firm needs to apply to be able to manage in the building. And OAs should dictate minimum prices that units can lease at — this helps keep away unwanted guests.”

But it may take a lot more convincing if OAs are to shift their stance. Their biggest grouse may not be about the music being too loud, but on the cost factor.

“Short-term rentals place a much higher load on a building’s facilities — a long-term resident probably rises in the morning, goes to work during the week and perhaps uses the facilities on weekends or evenings,” said Stevens. “Those using the property as a base for a holiday are probably in and out as well as make more use of the facilities such as the pool and gym.

“This cost then creates an additional expense borne by all those paying service charges.”

As a board member of the Oceana Residential Owners Association and resident, I am very aware that short-term rentals are not allowed in our community. We end up dedicating time and resources to control and manage this issue, which could be better spent elsewhere in the community. This matter is raised annually in our AGM and owners have tasked the board to stop this from happening. On a personal note, it is quite uncomfortable to have short-term residents as neighbours, you just don’t know who they are, or our rules or facilities in the same way as those of us who see it as home.

– Marc Haberland, board member, Oceana Residences

When I bought my home in Oceana, I knew that short term rentals were not allowed. I personally have experienced a neighbouring unit who rented out on a short-term basis and they treat the community as a hotel rather than home, The noise, constant change in occupants and general attitude of these visitors is something that I should not have to deal with if the rules are followed.

– Kosai Daioub, owner, Oceana Residences

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