UAE: Challenging a rent increase? Know your rights under Dubai's updated rental evaluation system

The right of landlords to improve rent is the most threatening factor in tenant relations in Dubai. Because it is the case that both parties are at odds, the benefits of one part result in losses for the other. 

The information that we grant in this article can be helpful to tenants and landlords since it helps them understand their rights and options.

The first thing we'll discuss is the frequency of rent being allowed to rise.

In Dubai, where the rent is fixed in a contract of tenancy, the landlords do not have the right to increase it anytime they wish. Instead, they can improve the rent, but not more or less than once per year. 

Additionally, the only legal way to increase fees is during contract renewal. Also, the tenant is entitled to the rent amount set in the tenancy contract for the entire duration. If a landlord decides to alter the rent rates over the duration of the contract, you could consider it a violation of the law. Therefore, tenants may complain to protect their rights.

The second requirement is that a landlord be notified of his plans to raise rent. In law, landlords must inform their tenants concerning the proposed rental improvement no less than 90 calendar days before the date on which the contract expires. 

To be clear, if he fails to make this notice on time, he cannot claim a rise in rent when renewing his tenancy agreement after the expiry date of the current contract. Instead, he will remain in the contract until the next renewal date arrives.

Truth About Rent Freezes - Does It Exist?

The possibility of an end to rent in Dubai has recently been the subject of much media attention. In January 2021, it was reported that the Dubai Land Department (DLD) hinted at a new law that could end rental agreements for up to three years. 

The news sparked excitement and the tenants' questions, causing excitement and anxiety. Let's look at what's happening.

A Rent Freeze That Was: A Blast From The Past

Many wonder if the rumored freeze on rent in Dubai is happening. To better understand this, look at the background of the rent laws in Dubai.

It is interesting to note that there was a freeze on rent in 2007 after the Landlord and Tenant Law was changed. In the past, landlords and tenants had to negotiate the amount of rent to be included in the tenancy agreement, and no rental improvements or lease modifications were permitted for the first two years.

In 2008, the rental freeze ended. Landlords were given the green light to improve rent after the initial year. However, they had to give tenants a heads-up period of 90 days. 

The government intervened to stop unjust practices by introducing a system controlling rent hikes and eviction notifications. This system is based on factors such as the market and comparable rents.

Thus, even though the rent freeze has expired, tenants can have peace of mind knowing that safeguards remain in place to protect them from unfair increases in rent.

How Much Can Rent Be Raised Annually In Dubai?

If you are a tenant in Dubai and Dubai, you may wonder what can allow the landlord to increase to raise the rent. 

A decree is in force - Decree No. 43 of 2013 provides landlords with guidelines for determining how much they can increase rent by the local market. Knowing the specifics of this law is essential to be prepared for future rent hikes.

Here's a simple outline:

• If your rent is at least 10% below the industry average, your landlord can increase it.
• If it's between 11% and 20% lower the threshold, your maximum rise is 5 %.
• Rents that are 21% to 30% below market rates: For rents between 21% and 30% below market rate, the improvement can reach 10 percent.
• If you're between 31% and 40 percent lower than you are, the maximum boost is 15%.
• If your rent is more than 40% lower than the market average, the landlord can only increase the rent by up to 20 percent.

These percentages may seem complicated to calculate, so don't worry! Tools like the Dubai REST application and the DLD website's rent calculator can assist you. If you disagree with the DLD, it is possible that the Rental Dispute Committee (RDC) can step in to decide on an equitable rent improvement per the decree's rules. 

Understanding your rights and regulations will help keep you up-to-date in the event of a dispute and help you avoid any surprises when your lease is due to expire.

Is My Building Rent-Controlled?

In simple terms, the short answer is "Yes". But let's make it clear that in Dubai, nobody regulates the rent amount required in the initial tenancy agreement. 

Also, the landlord can set the price of his rental property to be as high as he thinks is appropriate when attempting to lease it out. If, for instance, it is possible to locate a tenant who will pay twice the market value, he could fix the rent amount in his lease. 

However, existing tenancy agreements can be subjected to rent controls. 

To clarify the rent control laws clearly, the authorities regulate the rent rise caps and their frequency in a Tenancy agreement scheduled to be re-examined.

To make it easier for you, let's look at the laws related to rent control.

• Law No. 26 of 2007 defines the rights of the Real Estate Regulatory Authority to regulate an index of rental;
• Law No. 33, 2008, outlines the obligation of the landlord to notify his tenants of his plans to improve the rent and also set a minimum notice period before the expiration date;
• Decree No. 43 from 2013 outlines the permissible rent boost limitation.

Do Landlords Have the Right to Elevate Rent Suddenly?

In accordance with the RERA regulations on tenancy in Dubai, landlords are permitted to raise rent. However, this should occur after two years following the contract's establishment. Furthermore, any rent increase within Dubai has to follow the guidelines established by RERA.

If the landlords wish to improve the rent, they must give an initial 90-day notice at least 90 days before receiving the notice from tenants. 

Furthermore, they can't end the lease or remove tenants from the premises without giving an initial 90-day notice.

Landlords can boost their rents, but it must be similar to the rental index. This index shows how much landlords can rise within Dubai.

Content courtesy by Gulf News