Disputes between landlords and tenants are a worldwide phenomenon and Dubai is no different. But unlike in many places where dispute resolution forums have been defined but disputes are rarely resolved, Dubai’s rental dispute settlement forums actually work.
Besides, Dubai Land Department has provided all residents with an effective rent calculator that should be consulted in the eventuality of a rent increase. Rents are usually increased after a year and likewise, the rent index is also updated every year. Sometimes we see Dubai landlords ignoring the rents specified by the government and introducing an arbitrary rent hike. Here is how you can save yourself in such an event.
Register with Ejari
Before you rent an apartment, townhouse or villa in Dubai, know that all tenancy contracts have to be registered with Ejari. It costs around AED 200 and can save you a lot of hassle in the future. Registering your tenancy agreement with the government places tenants in a better position, as the government would be able to intervene and settle any disputes that may arise.
Another question that must be addressed is who would pay the Ejari fee? Real Estate Regulatory Agency (RERA) has not specified the party paying the fee, but generally, it is paid by the tenant. Where a tower is managed by a property management firm, the firm pays the fee, only to recover it from the tenants later.
Remember the 90-day notice
All landlords have to serve a 90-day notice if they wish to increase the rent of a specific residential unit. The increase must be according to RERA’s rent index and the notice sent through a registered mailing service. If a notice hasn’t been served, the landlord cannot raise the rent at all
In an event where there is no communication between the two parties, the contract is automatically renewed with the previous rents. If your landlord or real estate agent has given you a 30-day notice period, take the case with the rent dispute settlement committee and continue living in the apartment until the issue is solved.
Keep a close eye on rent index
Remember, following the rent index is mandatory for all landlords and so is the 90-day notice period. In case your rent has been increased to an amount that surpasses the limit outlined by the rent calculator, file a case with RERA and do not accept it in any case.
Know the Law
Dubai government has introduced strict laws to control arbitrary rent increases. Decree No. 43 of 2013 concerns the percentages of maximum property rent increase allowed upon renewal of tenancy contracts. The rent increase slabs are as follows:
- Rent will only be increased if the rent of a property unit is less than 10 percent of a similar property in the same area.
- If the rent is 11 to 20 percent less than the average rent of similar properties, the maximum rent increase will be equal to five percent of the rent value.
- In case the rental value of a unit is 21 to 30 percent less than average rent for similar units, the maximum rent increase allowed is 10 percent of the rental value.
- If rent of a residential unit is 31 to 40 percent less, the maximum rent increase allowed is equal to 15 percent of the rental value.
- For residential units having rents less than 40 percent or more than the average rent of a similar unit, the maximum rent increase applicable is 20 percent.