How much rent can be increased per year in Dubai?

Sunday, June 26, 2016

 

What is the rental hike on your property rental for this year? Here’s what you need to know.

  • Rent increases are dealt with by Real Estate Regulatory Agency (RERA): RERA reserves the exclusive authority to specify the percentage of rent increase of a property rental in Dubai. RERA’s website (www.dubailand.gov.ae) provides a rental increase calculator for calculating the legally permissible increase in rent. The maximum increase permitted is 20 percent and against the rent index. A property rental would need to be over 40 percent undervalued for a 20 percent rent increase to be legally applicable.
  • 90 days’ notice: Either party (tenant and landlord) must give 90 days’ notice to the non-renewal of the tenancy contract, unless otherwise agreed. A 90-day notice period is also applicable if the landlord wants to increase the rent, as per the RERA index. Failure to notify means that the landlord cannot raise the rent. If there is no electronic or written communication being served, the Dubai property rental contract is automatically renewed at the same rental price.
  • 12 months’ notice: lf the landlord wants to sell or use the property rental for his personal use or for his relatives of first degree, he/she must provide you with 12 months’ written notice prior to the eviction date through notary public or registered mail.
  • Register the tenancy contract with RERA: This ensures that the same Dubai property rental is not rented out twice at the same time. If you do not register the tenancy contract, any dispute arising out of the same will not be entertained by the Dubai Rent Dispute Settlement Centre.
  • Rent payment: The rent is normally paid as per the agreed terms in the tenancy contract. Payment of rent is usually made in the form of post-dated cheques.
  • Repairs and maintenance: The landlord is responsible for handing over the Dubai property rental to you in good condition, undertaking maintenance and repair works and providing you with all approvals required by government authorities to carry out agreed work. In return, as a tenant you should pay the rent on time and all other government charges and fees (as agreed), maintain the property, not carry out renovations or maintenance without the landlord’s permission and return the Dubai property rental in good condition.

Quick facts:

  • If you and your landlord don’t mutually agree to a new rent prior to a contract renewal, you have the right to file a case with the Rental Dispute Settlement Centre.
  • In this case, you will have to pay 3.5 percent of your annual rent as non-refundable fees (minimum AED 500 to maximum AED 20,000) and visit the dispute centre before a judgment is passed.

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