In this guide, you will get to know everything about Dubai Rent Increase Law because when staying in Dubai, one of the most prevalent residence choices is renting a home.
Why? Because renting is more convenient and inexpensive. Although a down payment and some security fees are generally what a tenant needs to rent a home in the city, knowing the laws that govern the legalities between a landlord and a tenant can help you minimize disagreements and make a better deal.
The Dubai property rental laws involve regulation by the- Real Estate Regulatory Affairs(RERA). Proper contractual parameters need to be established for a smooth working relationship.
Due to this, the RERA sets clear contract rules that must be abided by, and it makes amendments to the existing systems as and when required.
Dubai Rent Increase Law [Everything You Should Know About]
There are numerous articles or statutes established by the RERA, and knowing each of them might take a lot of time, and you might eventually give up.
To make your research process less cumbersome, we have listed all the crucial laws and amendments you must know before renting a home in Dubai.
The rules and requirements for a rent increase- are described in Article 9 of Law (26) of 2007, which states that the tenant and landlord have to settle on a rent value during the contract development and have to document it accordingly on the official tenant contract.
This documentation also involves the contract date required during the rent increase. According to the law, a landlord cannot increase the home rent before the defined tenure period from the contract date. Serving the tenure period is mandatory for rent increase.
Hitherto, landlords tended to raise the rent in higher percentages which caused discrepancies and led to disputes and misunderstandings. The governing body, therefore, has set statistically determined caps on the maximum rent increase in Decree No. (43) of 2013.
Example: According to Dubai property rental laws, If a landlord leases you a property at a price that is 10% below average, in comparison, to the price range of similar properties, then it is against the law to increase the rent in this condition.
The above situation might not apply to you as your rent was 11- 20% below the average rent. In this case, your landlord is allowed to increase the rent by 5% after the end of the tenure period.
To calculate the rent increase, as per the RERA standards, RERA rental calculator is available on the Dubai Land Department(DLD) official website.
Before Renting a Property in Dubai:
This part includes important rules a tenant should be aware of before renting a property in Dubai. Both parties must comply with the tenancy laws mentioned below throughout the renting process and even after that.
- All rental contracts need to be drafted legally into binding documents in a format set by the government or the regulating body. For this, RERA has made the Ejari registration mandatory for all kinds of tenancy contracts in Dubai.
- Tax implications: Every residential tenant must pay 5% of the yearly rent as rental tax. For instance, if the rent is AED 30000 then a tenant must pay 5% of that as rental tax. For commercial tenants, the rules are different as they need to pay 10% of the yearly rent as tax.
- The tenant and landlord must inform before 90 days in case of any amendments or changes to the contract. If you would like to terminate the contract, then for the country- of Dubai rent increase notice period of 90 days is mandatory before the contract expires.
- Eviction law- Law No. (33) of 2008(An amendment of Article 25 of Law No. (26) of 2007) states that if a tenant fails to pay the rent within 30 days of the landlord’s notice, then the landlord is allowed to evict the tenant.
- The landlord needs to provide public notice or a registered mail to the tenant with 12 month notice period for the following reasons- reconstruction, selling property, personal use, etc.
- In cases where the landlord dies, the tenancy contract does not expire but gets transferred to the inheritors. The contract remains conclusive until the inheritor terminates it.
- As per Article 18, if a landlord needs to construct or repair the property, they must provide official proof or license for beginning the project. The changes made by the landlord must not affect the optimum usage of the property by the tenant.
- Tenants are required to apply to the Dubai Water and Electricity Authority Connection(DEWA) for water and electricity supply to the house. The following documents will be required for applying to the DEWA- premise number, Ejari registration number, passport copy of the landlord and tenant, and deposit payment.
- Before the DEWA application, make sure that the previous bills are paid and that there are no pending payments for the residential or commercial apartment you are planning to rent. You can ask your agent or broker to look into it.
Frequently Asked Questions(FAQS)
- Can landlords increase rent every year in Dubai?
No, landlords in Dubai can only increase the rent when the tenure period is completed. After the tenure period of two years, the landlord must provide a notice period of 90 days to the tenant in case of a rent increase modification.
- In case of an unfair rent contract, where can I complain in Dubai?
After failed resolution attempts, you can seek the help of the Dubai Land Department(DLD) which has established a special department called Rent Disputes Settlement Centre.
- How much will Dubai rent increase in 2022?
The rent has increased over 20-27% from the previous year for villas and residential apartments.
- What is the maximum rent increase percentage in Dubai?
The percentage of rent increase depends upon the current difference between the market value and the original rent.
- Rent increase of 10%: If the existing rent is 20-30% lower than the market value.
- An increase of 15%: If the existing rent is 30-40% lower than the market value.
- Rent increase of 20%: If the existing rent is 40% or more of the market value.