What is the Rule Regarding Rent Increase in Dubai?
The real estate market can be confusing. For a foreigner, this could be considerably more challenging.
As millions of expatriates, students, and visitors flock to Dubai each year, rental space demand shoots up.
With an influx in tenants, some landlords have decided to take advantage. After all, most people are new to the Emirates and are oblivious of the law.
For example, a rogue landlord may want to increase your rent without notice. Another may want to evict you abruptly or lock the premise.
Therefore, as a tenant, you should make an effort to understand the rules that govern property contracts in Dubai. Keep reading to learn more.
The Real Estate Regulatory Agency
In Dubai, the Real Estate Regulatory Agency under the Dubai Land Department governs Dubai Rental market. RERA makes laws and regulates the relationship between landlords and tenants.
The DLD provides a Rental index to determine rent increases and guidelines to follow in case of conflicts.
The Rental Price Index is documentation provided by RERA with the average rent prices of property in Dubai.
The index consists of yearly updates and allows you to freely approximate rent increases.
How does the Rental Increase Calculator Work
Your landlord is allowed to increase your rent in Dubai. The increase is determined by Decree No. (43) of 2013. The decree states that the benchmark of rent increase is the average price of similar properties. The increase also happens during a lease renewal under the following provisions;
- No rent increase is allowed if the current rent is less than ten percent of similar units' current average market rental prices
- If the rent of the property unit is 11 to 20 percent less than the average rental value of similar units, then the landlord may increase the rent maximum by five percent of the rent of the property unit
- A landlord can increase the rent by ten percent if the current rent price is 21% to 30% below the average market price for similar properties
- A landlord can increase the rent by 15 percent if the current rent price is 31% to 40% below the average market price for similar properties
- A landlord can increase the rent by 20 percent if the current rent price is less than 40% of the current average market rent rates
Under the law and guidelines by RERA, your landlord can increase rent prices only if they give a 90-day notice of the contract change.
It is imperative to record the date you are given the notice.
The law allows you to refuse this increment if the notice is not provided on time.
What Do You Do in Case of a Conflict?
It is not uncommon for you and your landlord to differ. Whenever you cannot find a resolution, you can file a dispute with the Rent Disputes Settlement Center for mediation.
However, you have to pay 3.5% of your rent for the committee to consider your case.
They will look at the problem and set the correct rent. In some cases, you may be compensated up to a year's rent if the landlord was in breach of contract.
It is vital as a tenant to stay updated on current market prices. It helps you predict rental increases and protects you from a rogue landlord. Ensure you use the rental increase calculator for the most accurate numbers.