Complaints about rising rents from Dubai residents are increasing due to unreasonable increases being demanded by the landlord. There is no federal law that determines the rent cap, each emirate has its own laws.
For the emirate of Dubai, Law No. 26 of 2007 regulates the relationship between landlord and tenant and establishes rental rules. Regarding rent, the Supreme Court of the Union has indicated that “the effect of the provisions of a lease (lease contract) provided for in articles 742 et seq. of the Civil Code is that the rent is paid in consideration of the enjoy the leased thing”.
(It should be noted that the Dubai Law No. 26 of 2007 is applicable throughout Dubai, except for the areas covered by the DIFC zone, as real estate in the DIFC zone is regulated by the DIFC Law No. 4 of 2007) .
The law defines rent as a specified amount of consideration that the lessee is obligated to pay under the lease. The lease is the contract by which the lessor agrees to allow the lessee to benefit from the property for the specified purpose and period in exchange for a specified consideration and therefore the amount of rent will be specified. in the contract and will remain the same until maturity. of said contract.
In addition, the law provides for the determination of the value of the rent in the event that it is not provided for in the lease or when the rent is determined but it is not possible to prove it. In such cases, the Committee, that is, the Judicial Committee authorized to resolve disputes between landlords and tenants, must determine the rent of the property thus leased in accordance with the ‘similar rent’. The ‘similar rent’ must be specified by the committee in accordance with the Real Estate Regulatory Agency (RERA) rent increase percentage specification standards. In addition, the general economic circumstances in the emirate, the state of the property, the market rent in the same area and the existing legislation are factors that must be taken into account when determining the similar rent. RERA must establish criteria to determine rent increase rates in the Emirate, in accordance with the general economic conditions of the Emirate.
Any dispute related to the rental of the leased premises should be referred to the committee, as the committee’s jurisdiction includes all such disputes.
At the expiration of the lease, it must be renewed for a similar period and during the renewal the lessor can modify the contractual terms. You can review the rent you can keep at the same rent amount or you can increase or decrease it. The rent thus increased or decreased would be valid during the period of the lease. For the lease to continue in force, it is essential that the lessee agrees with the terms thus modified by the lessor, if the parties do not reach an agreement, the Committee may agree on a fair rent. If either party to the lease wishes to modify any of its conditions, it must notify the other party at least 90 days prior to the expiration date, but this condition may be waived by agreement between the landlord and the tenant. tenant.
The law also sets a ceiling on landlord rent increases so that landlords do not take advantage of the vulnerable position of tenants and exploit them through unreasonable increases in rent rates. Additionally, rent cannot be increased during a lease. It can only be increased after the expiration of the previous contract, so the rent will be maintained for a period of one year from the beginning of the lease.
In addition, the Dubai Decree No. 62 of 2009 relating to rental prices in the emirate of Dubai has fixed the maximum increase in rents for properties in the Emirate of Dubai according to the average rent of properties in the same area and the percentage difference between median income and current income. Thus, depending on the difference, the increase can be up to the following limit:
Yo. zero increase in rent in the event that the rent is up to 25% below the average rent of properties of similar specifications;
ii. 5% of the applicable rent in the event that the rent is 26% to 35% less than the average rent of properties of similar specifications;
iii. 10% of the applicable rent in case the rent is 36% to 45% less than the average rent of properties of similar specifications;
IV. 15% of the applicable rent in case the rent is 46% to 55% less than the average rent of properties of similar specifications; Y
v. 20% of the applicable rent in case the rent is more than 55% less than the average rent of properties of similar specifications.
Apart from this, the Dubai government has provided us with an online rent increase calculator at the following website: http://www.dubailand.gov.ae/english/Tanzeem/Rentals/Rental_Increase_Calculator.aspx
The aforementioned government website provides a service to calculate increase percentages to obtain rental values in certain areas as a guidance tool. All the user has to do to use this service is to select the calculator from the website and enter the required details and then the increase limit and average rent for the requested area and unit will be provided.
Tips to avoid an illegal rent increase:
1. Make sure the landlord has notified you in writing of the proposed rent increase no less than 90 days before the end of the lease.
2. Verify that the increase amount matches the RERA rent calculator for your property.
3. If you cannot come to an agreement with your landlord on the amount of the rent increase, apply to the Rent Committee.
