The Real Estate Regulatory Authority (RERA) of Dubai has created a Rental Increase Calculator that serves as a guide for rental increases and helps both landlords and tenants understand if a rental increase is permitted. It applies to all rental properties in Dubai (both residential & commercial as well as freehold and other areas).
How does the rental increase calculator work?
The rental calculator references the RERA Index which is published once a year in January. This index provides guidelines for rental ranges for each area of Dubai for the whole year. Previously, the rental index was published quarterly.
In order to reference the RERA Index, the rental calculator requires the following details of the property and tenancy agreement:
• Property Type (residential, commercial, industrial or staff accommodation)
• Tenancy Contract Expiry Date
• Main Area (Deira, Bur Dubai or Freehold)
• Category (based on property type)
• Area (community, sub community)
• Current Annual Rent
The calculator then determines whether a rental increase is allowed or not by comparing the current annual rent of your property against the data in the index.
As of October 2017, the rental increase calculator does not factor in the following details about the property:
• Age of the property
• Condition of the property
• Size of the property
• Facilities available on the property
• Proximity to amenities
• Floor level (for multistorey dwellings)
When can my rent be increased?
Your rental amount can only be increased if the rental calculator says it is permissible. If so, then your landlord must serve you a notarised letter of rental increase a minimum of 90 days prior. Any verbal or non-written notice is unacceptable and not legally binding.
When is a rental increase not allowed?
Simply put, a rental increase is not allowed if the rental calculator says so. Landlords either tend to demand rental increases that are not allowed or they try to increase rent beyond what the calculator recommends (as per the Rental Index). In either case, a rental increase has to fit the recommendation from the calculator. Failure to fit the bill renders the increase illegal and as a tenant, you are not obliged to comply with the demand.
My landlord won’t back down on a rental increase, what should I do?
In these cases where discussions on the rental increase reach a stalemate, you may need to file a rental dispute case. Our handy guide on this process will help you best prepare for your visit to the Rental Dispute Settlement Centre in Deira, Dubai where the relevant authorities will handle your case.
It should be noted that maintaining good communication with your landlord can help avoid complications when it comes to rental increases and other matters.
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