Rental cap in Ajman being re-evaluated

The rent cap in Ajman is being re-evaluated and will soon be presented to His Highness Sheikh Humaid bin Rashid Al Nuaimi, Supreme Council Member and Ruler of Ajman, according to a top government official.

"It is being re-evaluated. We are trying to maintain the same level or lower it, but certainly not increase it. We are also considering making it yearly rather than the current 20 per cent increase after three years passed through an Emiri decree," Ajman Real Estate Regulatory Agency (Arra) Director-General Omar Al Barguthi told Emirates Business. "These are our recommendations and we are yet to present them to His Highness."

According to real estate experts, soaring rents in Dubai have led to people looking for affordable housing options in Ajman, which also witnessed substantial increase in rents in 2008. However, they now believe rents have started to decline in Ajman, with a two-bedroom apartment now available at Dh45,000 to Dh50,000 compared to Dh60,000 to Dh65,000 last year.

Separately, the Arra chief reiterated that developers had to complete the registration process and open escrow accounts by May 1. The agency signed an agreement with Ajman Bank on Tuesday, making it the first institution to offer escrow account facility in the emirate.

Any property developer that failed to complete registration by the deadline can face a minimum of Dh100,000 as penalty and be banned from doing business in the emirate. Any developer that advertised an unregistered project will be fined.

In an effort to synchronise development in the emirate, the agency is currently registering developers and master developers as well. "We do have a criteria to register all master developers and thereafter regulate relations between them and their developers. All developers have to register with us, or else they will not be able to operate in Ajman," said Al Barguthi.

Asked how can investors approach Arra to file complaints, he said: "They should come to us… call or fax us all the documents. However, we are following a balanced approach and are also looking at protecting the interests of developers and investors."

Al Barguthi told this newspaper on Tuesday the market is going through a "correction" phase. "It will be healthy for the market and offers a golden opportunity for everyone who can see and predict the potential in what's happening," he said.

Ajman opened up its freehold property sector to foreign nationals in 2004. The law allows non-GCC developers and buyers to own freehold land and property in designated areas determined and approved by the Ruler. In January this year, Sheikh Humaid issued a decree to establish Arra.

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