Dubai issues new rent rules

22 December 2013

Rents can now be raised when tenant is paying 11 per cent below market value

Dubai has revised its rent cap rules, giving landlords more flexibility to raise rents at lower trigger points.

Under the decree, issued by Dubai’s ruler, rent increases in Dubai can be triggered when tenants are paying 10 per cent below the market rate, rather than 25 per cent under the previous rent-cap rules.

Under the prior guidelines, rents from 26-35 per cent below market rate could be increased by 5 per cent, those 36-45 per cent below by 10 per cent, 46-55 per cent below by 15 per cent and rents more than 55 per cent below market rate could be increased by 20 per cent.

The new levels at which rent increases can be triggered are 11 to 20 per cent below market rate (5 per cent increase), 21 to 30 per cent below (10 per cent rise), 31 to 40 per cent below (15 per cent rise) and a maximum 20 per cent rise for rents more than 41 per cent below market rate.

The average rent, which will be used as the benchmark for the rises, will be determined by the Real Estate Regulatory Agency’s (RERA) rent index.

The decree, which takes effect immediately, applies to landlords from the public and private sectors in Dubai, including private development areas and free zones.

The Dubai Government also issued a statement encouraging RERA to continue to standardise rent regulation and to enforce laws on all rental properties following the Expo 2020 victory.

“The Expo win is a gift to the people of this country and this Emirate,” said Sheikh Ahmed bin Saeed Al Maktoum, chairman of the Dubai Supreme Fiscal Committee and head of the Expo bid higher Committee. “It is now all our duty to ensure that Dubai continues to offer great opportunity for business and living.”

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