How Much Rent can be Increased in Dubai?

The Real Estate Regulatory Agency (RERA) in Dubai sets the Rental Increase Calculator to safeguard the interests of both tenants & landlords. The annual rent increase is generally limited to 5%. However, that can vary based on location, property type, and the time elapsed till the last rent increase.

Are you a tenant in Dubai whose lease agreement is nearing expiration? If so, you might be wondering if your landlord will increase your rent and, if so, by how much. Understanding rent increase regulations is crucial for both tenants and landlords. Fortunately, the Dubai Land Department has developed an online tool to simplify this process: the RERA Rental Increase Calculator. Let’s delve into how this tool works and what you need to know about rent increases in Dubai.

Understanding RERA’s Role in Dubai’s Real Estate

RERA, the Real Estate Regulatory Agency, is a division of the Dubai Land Department. It plays a pivotal role in overseeing the real estate sector in Dubai, setting regulations, managing market development, and ensuring legal compliance. RERA’s responsibilities also include resolving disputes between tenants and landlords and maintaining the integrity of real estate transactions and advertisements.

Using the RERA Rental Increase Calculator

To determine the potential increase in your rent, follow these steps:

1. Visit RERA’s Official Website: Access the tool online for the most accurate and updated information.
2. Select Property Type: Choose from residential, commercial, industrial, or staff housing units.
3. Contract End Date: Indicate when your current lease is due to expire.
4. Property Details: Specify if you’re renting an apartment or a villa, and select the area of residence. Enter details like the number of rooms and your current annual rent.
5. Calculate: After completing the captcha verification, the calculator will provide you with guidelines on the possible rent increase.

Understanding Rent Increase Guidelines

The rent increase is based on a slab system that compares your current rent with the average rent for similar properties in your area. Depending on how much lower your current rent is compared to the average, your landlord might be entitled to increase it by 5%, 10%, or 15% upon lease renewal.

When Can Landlords Increase Rent?

In Dubai, the rules governing rent increases are designed to maintain a fair and balanced relationship between landlords and tenants. Understanding when and how a landlord can increase rent is crucial for both parties to ensure compliance with local regulations.

Dubai’s Legal Framework for Rent Increase

The ‘Dubai Law No. 26 of 2007 Regulating Relations between the Landlord and Tenant in the Emirate of Dubai,’ commonly known as the Dubai Rent Law, sets out clear guidelines for rent increases.

Notice Period Requirement

• 90-Day Notice: One of the key stipulations of the Dubai Rent Law is that landlords must provide tenants with a 90-day written notice before any rent increase. This notice period is mandatory, regardless of the terms of the lease agreement or any verbal agreements between the landlord and tenant.

Conditions for Rent Increase

• Alignment with RERA Rental Increase Calculator: Landlords are advised to use the Real Estate Regulatory Agency (RERA) Rental Increase Calculator to determine the permissible rent increase. This tool compares the current rent of the property with the average rent for similar properties in the area.
• Market Rate Comparison: The rent can be increased if the current rent is significantly lower than the average market rate for similar properties in the area. The calculator uses a slab system to determine the maximum allowable increase, which can range from 5% to 15%, depending on the difference between the current rent and the average market rent.

Tenant’s Right to Challenge

• Dispute Resolution: If a tenant believes that a rent increase is unjustified or exceeds the legal limit, they can contact the Dubai Land Department’s Rental Dispute Center. The Center provides a platform for resolving such disputes and ensures that any rent increase adheres to the legal guidelines.

Addressing Illegal Rental Increases

If you suspect that your rent increase exceeds the legal limit, you can contact the Dubai Land Department’s Rental Dispute Center at 800 4488. For unresolved issues, file a complaint at the Rent Disputes Settlement Center in Deira.

RERA’s Encouragement for Fair Negotiations

RERA promotes the use of the Rental Increase Calculator during lease negotiations to ensure fairness and transparency. It’s advisable for both existing and new tenants to check the Rental Price Index using the calculator. Landlords should also use this tool to determine appropriate rent increases.

Key Takeaways for Tenants and Landlords

• Stay Informed: Familiarize yourself with the RERA Rental Increase Calculator and Dubai’s rent increase regulations.
• Plan Ahead: Landlords should propose any rent increase three months before the contract’s expiry date.
• Verify Increases: Ensure any proposed rent increase is within legal limits, considering the average market price for similar properties in the area.

Conclusion

Understanding and adhering to rent increase regulations is vital for maintaining harmonious tenant-landlord relationships in Dubai. The RERA Rental Increase Calculator is an invaluable tool for navigating these waters, ensuring that any rent adjustments are fair and within legal parameters.

Whether you’re renting, buying, or selling property in Dubai, staying informed about RERA regulations and using tools like the Rental Increase Calculator is essential. For more detailed information and property-related updates in Dubai and the UAE, consider following Driven Properties, and always use official RERA tools for accurate calculations and information.