Question: I’m a tenant in Dubai and recently received a rent hike notice that seems unfair. Dubai has introduced a smart rental index. How can I use this tool to negotiate a better rental rate?
Answer: In Dubai, rental increases are regulated by specific laws, including Decree No. (43) of 2013, which outlines the maximum percentage by which rent can be raised. The increase depends on how your current rent compares to the average rental value of similar properties in your area, as determined by the Dubai Rent Index approved by the Real Estate Regulatory Agency (RERA).
Here’s how rent increases are calculated:
- No increase if your rent is up to 10% below the average rental value of similar units.
- 5% increase if your rent is 11% to 20% below the average.
- 10% increase if your rent is 21% to 30% below the average.
- 15% increase if your rent is 31% to 40% below the average.
- 20% increase if your rent is more than 40% below the average.
The Dubai Rent Index serves as the benchmark for determining the average rental value of similar properties. This index is updated regularly by RERA to reflect market conditions.
Key Legal Provisions:
- Article 3 of Decree No. (43) of 2013: The average rental value is determined using the RERA-approved Rent Index.
- Article 10 of Law No. 26 of 2007: RERA has the authority to set rent increase criteria based on the economic situation in Dubai.
- Articles 13 and 14 of Law No. 33 of 2008: Both landlords and tenants must notify each other at least 90 days before the lease expires if they wish to amend rental terms. If no agreement is reached, the Rental Dispute Centre can determine a fair rent based on RERA’s criteria.
Practical Steps for Tenants:
- Check the Dubai Rent Index: Use the RERA Rent Index to compare your current rent with the average rental value of similar properties in your area.
- Verify the Notice Period: Ensure your landlord has provided a 90-day written notice before proposing any rent increase.
- Negotiate with Your Landlord: If the proposed increase exceeds the permissible limit, present evidence from the Rent Index to support your case.
- Seek Legal Assistance: If negotiations fail, you can file a dispute with the Rental Dispute Centre to resolve the issue.
Important Note:
- If your lease renewal occurs before 2025, the previous Rent Index applies.
- For renewals during or after 2025, the updated Rent Index will be used.
By understanding your rights and leveraging the Dubai Rent Index, you can effectively negotiate fair rental terms and challenge unjustified increases. For further assistance, consult RERA or seek legal advice to ensure your tenant rights are protected.
