Dubai’s vibrant real estate market is known for its fluctuations in rental prices, impacting residents and landlords alike. This makes it all the more important to understand the regulations governing property rents and know what options are available when dealing with rent hikes.
In the Emirate of Dubai, rent increases are only permissible upon renewal of the lease agreement, with landlords mandated to notify tenants of any increase at least 90 days prior to the lease expiry. Failure to provide timely notice will result in the increased rent not applying to the renewed lease period.
Furthermore, the Dubai Law established a rental index that determines the permissible rate of rent increase, outlining specific conditions and percentages for allowable rent hikes. As per this Decree, the following conditions and percentages govern the allowed rent increases: –
- No increase is permitted if the current rent is 10% below the average rent of similar properties
- A maximum of 5% increase may be applied if the current rent is 11% – 20% below the average rent
- A maximum of 10% increase may be applied if the current rent is 21% – 30% below the average rent
- A maximum of 15% increase may be applied if the current rent is 31% – 40% below the average rent
- A maximum of 20% increase may be applied if the current rent is more than 40% below the average rent
The Real Estate Regulatory Agency (RERA) also provides a free Rental Calculator to help tenants and landlords determine the permitted percentage of rental increase. For added assurance, parties may also apply for a Real Estate Rental Valuation Application, which is a fee-based service provided by RERA.
In the event of receiving notice of increase in rent, the tenant can attempt to negotiate with the landlord to reach an amicable solution. If the landlord remains undeterred, the tenant has the option to file a dispute regarding the increase in rent with the Rental Disputes Centre (RDC) along with the submission of the legally translated (to Arabic) copies of the necessary documentation such as proof of identification, tenancy contract and relevant correspondences. The tenant may also apply for a valuation certificate as outlined above, keeping in mind the cost considerations.
Once a dispute has been raised, the RDC shall render a decision that is appealable by either party within the legally stipulated time frame.
Resolving rental disputes can be a source of stress for landlords and tenants alike. In the Emirate of Dubai, the RDC offers a systematic approach to resolving these conflicts. However, proper legal guidance to understand your rights and the legal procedures involved is necessary to secure a favorable outcome. Contact us to know more!
