Dubai: What rights do tenants have if landlords increase rent exorbitantly?

Question: Does Dubai have any rules around increasing rents? Is there a cap on the increase? If I feel my landlord has increased the rent unjustly, what legal options do I have? How does the process work?

Answer: In Dubai, the percentage increase in rent may depend on the average rent increases of the rented properties in the particular designated area. This is in accordance with the Article 1 of Decree No. (43) of 2013 Determining Rent Increase for Real Property in the Emirate of Dubai.

When renewing real property rent contracts, the maximum percentage of rent increase for real property in the emirate of Dubai shall be as follows:

1. No rent increase, where the rent of the real property unit is up to 10 per cent less than the average rental value of similar units;
2. Five per cent of the rent of the real property unit, where the rent is 11 per cent to 20 per cent less than the average rental value of similar units;
3. 10 per cent of the rent of the real property unit, where the rent is 21 per cent to 30 per cent less than the average rental value of similar units;
4. 15 per cent of the rent of the real property unit, where the rent is 31 per cent to 40 per cent less than the average rental value of similar units;
5. 20 per cent of the rent of the real property unit, where the rent is more than 40 per cent less than the average rental value of the similar unit.”

The average rental value refers to the average rent for similar properties in Dubai. The average is determined in accordance with, the ‘Rent Index of the Emirate of Dubai’, which is approved by the Real Estate Regulatory Agency (Rera). This is in accordance with the Article 3 of the Dubai Rent Increase Law.

“For the purposes of application of Article (1) of this Decree, the average rental value of similar units shall be determined in accordance with the ‘Rent Index of the Emirate of Dubai’ approved by the Real Estate Regulatory Agency.”

Furthermore, the rent increase and decrease related to residential properties in Dubai is decided by the Rera. Article 10 of the Law No. 26 of 2007 regulating the relationship between landlords and tenants in Dubai states that “Rera shall have the authority to establish criteria relating to the percentage of rent increase in the emirate in line with the requirements of the prevailing economic situation in the emirate.”

While renewing a rent contract, both a landlord and a tenant may discuss and amend the terms, including the rent. If both landlord and tenant disagree to decide on the rent, the Rental Dispute Centre of Dubai may decide what the fair rent should be, based on specific criteria.

Additionally, if either party intends to make changes to the rent terms, they are required to notify the other party at least 90 days before the rent contract expires, unless both parties agree otherwise. This is in accordance with the Article 13 and 14 of the Law No. 33 of 2008 Amending Law No. 26 of 2007 Regulating the Relationship between Landlords and Tenants in the Emirate of Dubai.

“Article 13

For the purposes of renewing a rent contract, the landlord and tenant may, prior to the expiry of the rent contract, amend any of its terms or reconsider increasing or reducing the rent. If the landlord and tenant fail to reach an agreement in this regard, the tribunal may determine the fair rent, taking into account the criteria stipulated in Article (9) of this Law.”

“Article 14

Unless otherwise agreed by the parties to a rent contract, where either party wishes to amend any of its terms pursuant to Article (13) of this Law, that party must notify the other party of this intent no less than ninety days before the date on which the rent contract expires.”

Based on the aforementioned provisions of law, your landlord may only increase the rent of the rented property if the Rera index permits an increment of rent. Furthermore, your landlord may only increase the rent by giving written notice to you at least 90 days prior to the renewal of the rental period. In the event of a dispute with the landlord, you may have to approach the RDC to decide on an increase in the rent of your rented property.