Leasing Process in Oman

Renting a property in Muscat is fairly straight forward and the entire process is governed by well drafted legislation designed to protect both landlord and tenant. The majority of residential lettings are for a 12 month period but this can be shorter or longer by mutual agreement.

Please note for relocating UAE residents, unlike in Dubai, Landlords pay leasing agents fees in Oman.  Some agents will try and charge tenants a fee.  Savills and reputable agents will not.

All leases are completed on a one page standard Municipality agreement which sets out the core details such as rent, term, parties and some general observations including general repair and maintenance obligations. The landlord is generally liable for all major repair works but the tenant is responsible for maintaining the property to everyday standards and is obligated to return the property at the end of the lease in the same condition as originally taken.

 

In the vast majority of cases, the tenant is responsible for payment of all utility costs including electricity, water and gas. Upon handover of a property, meter readings are taken and tenants are responsible for payment from that date. All leases have to be registered at the Muscat Municipality by law and the estate agent arranges this directly. The landlord is responsible for payment of the 5% tax for this.

 

This step is vital and if any tenant occupies a property with an unregistered lease, there is no protection afforded under the law and eviction could result without recourse to any authority possible. To register a lease a tenant must hold residency rights and have labor clearance papers in place. Alternatively the tenant’s employer may take out the lease in the corporate name as long as it is an Omani registered company (please note GCC companies do not qualify for this). There is no set rule as to who pays letting fees with some lesser regulated estate agents charging tenants as well as landlords. Please note that Savills Oman (and other reputed estate agents) does not charge tenants any fees, the letting costs are met entirely by the landlord.

 

Rent is usually paid in advance at the commencement of the lease by way of post dated cheques. Advance rent can be for one year, six months or quarterly in some instances with a one month holding deposit paid also at lease commencement, or company guarantee letter if a corporate let. Over the years there have been attempts to regulate the rental market with rent capps put in place, to ensure housing does not become too expensive for the general population. These provisions are subject to ongoing change and today, there is no control as to how much a landlord can increase rental on a yearly basis.

 

Generally, Landlords are very realistic and realize that if they increase the rents too far tenants will simply move to another property. Of great importance is a provision in the law that, any tenant must serve a minimum of three months’ notice before the lease expiry date if he/she wishes to vacate at that time. Failure to do so results in automatic renewal of the lease on the same terms and conditions for a period matching the original term.

 

A tenant cannot serve notice at any time to exit a lease on three months’ notice, only before the expiry of the originally agreed term. Likewise, a landlord cannot serve notice on a tenant to vacate until 3 months before the lease expiry and only if he/she needs the property back as their main residence. Effectively tenants have got an automatic right to extend their lease for 3 years from originally taking the property unless the landlord requires it back for own use which is quite rare.

 
muscat

For those relocating to Muscat, the choice of where to live can be quite daunting and challenging. Although the city is relatively small, time travel distances can be long, especially in rush hour periods so many base their initial location decision on proximity to work or schooling

 

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