RERA Dubai Rent Increase Law: Everything You Need to Know

The recent increase in the real estate rental prices in Dubai has affected almost every tenant and landlord. Overall, about a 20% increase in rental prices was reported in the real estate sector in the past year. This has encouraged so many tenants to learn more about regulations and laws that govern rental increases in the region.

So, the next time you are up for lease renewal in Dubai, you need to equip yourself with this information to ensure fairness and transparency. 

To streamline the leasing process, the Dubai Land Department (DLD) has introduced the RERA rental index tool. This tool allows you to determine the accurate rent of your property based on its type, location, and size. 

The RERA rental index calculator allows for the best property management by enabling both tenants and landlords to better understand rental adjustments upon lease renewal.

Here is all you need to know about RERA Dubai’s rent increase law

• About RERA
• RERA Rental Index
• RERA Rental Increase Law Dubai
• Steps for Using the RERA Rental Increase Calculator
• Frequently Asked Questions

About RERA

Real Estate Regulatory Authority (RERA) is a subdivision of DLD that deals mainly with the real estate sector. It is the job of RERA to establish and enforce real estate laws and regulations, supervise market trends, and provide foreign investors with fixed guidelines.

RERA aims to give a strong regulatory framework that promotes transparency and openness in real estate agreements and transactions.

RERA Rental Index

Established in 2009, the RERA rental index ensures fairness and stability in the rental sector to safeguard the interests of landlords and tenants. Every year this index is updated depending on the data gathered from market surveys and existing regenerated tenancy contracts in Dubai.

This index plays a pivotal role during lease renewal where it allows you to figure out if you are eligible for a rental increase or not. Landlords can use the rent increase calculator developed by DLD to figure out how much rent to increase for their property.

RERA Rental Increase Law Dubai

Over the years there have been observed various changes in the RERA Rent Increase Law of Dubai. Article 9 of Law (26) of 2007 states that both landlords and tenants have to specify a mutually accepted rent value in the agreement and this amount will not rise before the end of two-year tenure.

The landlords must inform the tenants about future rent increases at least 90 days before the expiration of the contract. It is up to the tenant to accept or refuse this increase. However, in case of refusal, a 60-day notice before the renewal date is mandatory.

Every increase in the real estate rent is governed by Decree No. (43) of 2013 which limits the increase to a maximum of 20% from 2013 to date. 

Article 10 of Law (26) of 2007 gives RERA the sole jurisdiction over specifying the rent increase percentage in Dubai.

Following are percentage increases in the rent according to the RERA rental increase law:

• If the current rent is 10% less than the average rent of similar units, there is no rent increase applicable.
• If the current rent is lower than 11-20% of the average for similar real estate, a 5% increase will be applicable.
•  If the current rent is lower than 21-30% of the average for similar real estate, a 10% increase will be applicable.
• If the current rent is less than 31-40% of the average for similar real estate, a 15% increase will be applicable.
• If the current rent is more than 40% below the average for similar real estate, a 20% increase is applied.

Steps for Using the RERA Rental Increase Calculator

Here is how you can use the RERA rental increase calculator to ascertain permissible rental adjustments for your property:

• Visit the official website of DLD to access the RERA rental increase calculator.
• Enter the details about your property in the respective section. You should know things like the contract date, property type, expiry date, property location, number of bedrooms, current rental amount, etc. to complete this section.
• After that, you can simply review the results with a single click. These results will indicate whether a rental increase is permissible or not based on the current RERA regulations.
• Tenants can compare the proposed rent increase with the RERA-approved rates to ensure compliance. 

Conclusion

The purpose of the RERA rent increase law is to protect the interests of every party involved in the rental agreement while keeping in mind the current market trends and conditions.

As a tenant, you must check the rental price index and as a landlord, it falls on you to determine the appropriateness of rent increase using the RERA rent calculator.

According to the rental increase law, if your rent is within 10% of the average rent in the same area for a similar property, a rent increase will not apply to you. An increase of about 20% is mandated when the rent is considerably lower than the above standard.

So, keep all these key points in mind when signing a new lease or a lease renewal to be on the safe side.

Frequently Asked Questions

1. What is the new rent law in Dubai?

According to this law, if the current rent is 10% less than the average market rate for a similar property no rent increase is applied.

On the other hand, if the current rate is between 11-20%, 21-30%, and 31-40% less than the average value then an increase of 5%, 10%, and 15% is applicable respectively.

If the current rent is 40% or above less than the average rent, then a 20% increase is mandated in the rent.

2. How much rent can a landlord increase in Dubai?

The landlord can increase the rent by 5%, 10%, 15%, or 20% if the current rent of the property is 11-20%, 21-30%, 31-40%, and above 40% less than the average value for the same property respectively.

3. How to inform the tenant of the rent increase in Dubai?

Landlords need to send a 90-day notice to the tenants before increasing the rent.

4. What is the notice period for the RERA rent increase?

A 90-day notice period is fixed for RERA rent increase.

5. Which rent law in Dubai imprisons people?

According to Article 217 of the UAE penal code, forging tenancy contracts is an offense that if proven can lead to a 10-year sentence.

6. Can a landlord increase your rent in Dubai?

Landlords can increase the rent only if the current rent is much less than the average market value for the same property. The rent increase must always be according to the RERA rental index.