Updated RERA index: Dubai Rent Increase Law 2024

Dubai’s rental market has undergone significant changes with the introduction of the new rental laws in 2024. The Dubai Rent Increase Law, aims to balance the interests of both tenants and landlords while promoting transparency and fairness. 

Key Takeaways

• Understanding RERA Index 
• The Latest RERA Rental Index Update
• Utilizing the RERA Rent Calculator 
• Legal Standards for Rent Increases in Dubai
• Termination Rules Under Dubai’s Tenancy Law
• Legal Recourse for Disputes
• Steps to Take Against Illegal Rent Increases
• Expert Legal Consultation for Rental Law Issues

Grasping the Latest RERA Rental Index Update

Understanding RERA Index 

The new Dubai Rent Increase Law encompasses updates and guidelines from the Dubai Real Estate Regulatory Agency (RERA). These updates are enforced through RERA’s directives and the rental increase calculator. Introduced in 2009, the RERA rental index aims to promote transparency and stability in the rental market, safeguarding the rights of both landlords and tenants. 

The index is updated annually using data from registered tenancy contracts and market surveys. It also sets guidelines for permissible rent increases, which are allowed only once a year during lease renewal. The RERA rental index law stipulates the maximum allowable increase, which varies depending on the disparity between the current rent and the average market rate

The Latest RERA Rental Index Update

The most recent RERA Rental Index update, effective from March 2024, permits rent increases up to a specified limit. This update allows property owners to adjust rents to align with the market value. Landlords can apply the rent increase only once a year during the contract renewal period, and tenants must be notified 90 days in advance. 

Both parties should use the RERA index calculator to verify whether the new rent falls within the legal range. No rent increase is applicable if the current annual rent is below 10% of the calculated market value. 

Decree No. 43 of 2013, issued by the Dubai government, outlines the maximum allowable rent increases for landlords. This decree bases the permitted increase on the average market price of similar properties in the same area. Tenants should be aware of the following key points:

• Less than 10% below market rate: No increase allowed.
• 11-20% below market rate: Up to 5% increase allowed.
• 21-30% below market rate: Up to 10% increase allowed.
• 31-40% below market rate: Up to 15% increase allowed.
• More than 40% below market rate: Up to 20% increase allowed.

These guidelines ensure that rent increases are fair and consistent with market conditions, preventing arbitrary hikes that could unfairly burden tenants.

Utilizing the RERA Rent Calculator 

The Dubai Land Department has introduced an online RERA Rent Calculator that aligns with the Dubai New Rental Law, enhancing the lease renewal process by ensuring fairness and transparency between landlords and tenants. This tool assesses factors such as market rates, location, current rent, property type, and the number of rooms to establish rental prices and determine if a rent increase is justified, in compliance with the RERA rental index law and the law for rent increase in Dubai.

The maximum rent increase for properties in Dubai varies based on the location, type and size of the property, and the current market value.

Legal Requirements for Rent Revaluation

Starting April 1, 2024, Dubai landlords must get a legal order before they can request a rent revaluation. Under the Dubai Rent Increase Law, landlords can still apply for a rent revaluation through RERA if they believe the new rental index undervalues their property. However, they now need to attach a judgment or legal order to their request.

This new rule applies to all rent revaluations from April 2024. According to the Ejari portal, landlords must start the process by filing a case with the Rent Disputes Settlement Centre (RDC) to get the necessary legal order. This ensures that all rent revaluations follow the Dubai Rent Increase Law and the RERA rental index law, keeping the process fair and transparent.

Legal Standards for Rent Increases in Dubai

It is important for tenants in Dubai to be aware of their legal rights and rental laws. Those who are unaware may face the risk of illegal contractual changes by their landlord. 

The most important legal guideline dictates that tenants must be given notice regarding changes in their contract, such as increasing the rent. If a landlord does not provide this notice, tenants can legally refuse a changed rental amount. Tenants must also carefully review their contract during rental increases, in case there have been further changes made by the landlord. 

Termination Rules Under Dubai’s Tenancy Law

The updated Landlord and Tenant Law clarifies the conditions under which landlords can terminate leases, outlining specific notice periods and acceptable reasons for termination to protect tenant rights while allowing landlords to manage their properties effectively.

Guidelines for Tenant Eviction: Before and After Lease Expiration

Eviction Before Lease Expiration:

The Landlord and Tenant Law outlines nine specific reasons a landlord can evict a tenant before the lease ends:

1. The tenant fails to pay rent within 30 days after being notified.
2. The tenant sublets the property without the landlord’s permission.
3. The property is used for unethical, immoral, or illegal activities.
4. A commercial space is vacant for 30 consecutive days or 90 days in a calendar year.
5. The property is used for purposes other than what it was leased for, or this usage violates Dubai’s planning and building regulations.
6. The property urgently needs repairs, as confirmed by a technical report approved by Dubai Municipality.
7. The tenant’s actions endanger the safety of the property or cause damage due to intentional or gross negligence.

Eviction at Lease Expiration:

To evict a tenant after the lease expires, landlords must follow specific guidelines:

1. An eviction notice with reasons must be sent via registered or notarized mail.
2. The landlord must give the tenant twelve (12) months’ notice before the eviction date.

A landlord can evict a tenant after the lease expires for the following reasons:

1. The landlord plans to demolish the property for reconstruction or to add new buildings, with necessary approvals obtained.
2. The property requires major renovations or maintenance that cannot be done while the tenant is living there, supported by a technical report approved by Dubai Municipality.
3. The landlord, who owns no other similar suitable property, wishes to use the property for themselves or an immediate family member.
4. The landlord intends to sell the property.

Legal Recourse for Disputes

In cases of disputes, landlords have access to legal recourse through designated judicial bodies. The law provides a structured process for resolving conflicts, ensuring that both parties can seek fair adjudication under the Dubai Rent Increase Law.

Steps to Take Against Illegal Rent Increases

If a tenant faces harassment in the form of an illegal rent increase by their landlord, they can file a case with the Rent Disputes Settlement Centre at the Dubai Land Department. To address this issue, the Dubai government issued a rent decree in 2013 to curb the rise in rental disputes.

Decree 43 applies to landlords in both public and private sectors. Article 1 of the decree provides a rent cap structure, outlining the maximum allowable percentage for rent increases. The rent cap varies based on the property rental value and the average market rental rate in different areas of Dubai.

Tenants should first try to communicate with their landlords to reach an amicable solution. Using the rental calculator to check if a rent increase is justified is an effective way to protect one’s rights under the Dubai Rent Increase Law. If the landlord is unresponsive, tenants can approach RERA through their website or visit their office for assistance.

Frequently Asked Questions

1. What are the key changes in the new rental law?
   • The key changes include stricter regulations on rent increases, enhanced tenant protections, and clearer guidelines for lease renewals and terminations.
2. How can tenants ensure their rent increase is lawful?
   • Tenants should use the RERA Rent Calculator and verify increases against the latest RERA index. Legal consultation can also provide clarity under the law for rent increase in Dubai.
3. What should landlords do to comply with the new law?
   • Landlords must adhere to the RERA rental index law for rent increases, provide proper notice for changes, and follow the legal procedures for lease terminations.

Expert Legal Consultants in Dubai for Rental Law

For those needing personalized advice, consulting with legal experts is highly recommended. Firms like Raya Al Ameri Advocates offer specialized services in real estate law, providing valuable guidance and representation in rental disputes.

Conclusion

The Dubai New Rental Law 2024 ensures that the rent changes are fairer and clearer. It’s important for both tenants and landlords to know these changes to manage their rentals well. By following the new rules under the Dubai Rent Increase Law and getting legal advice when needed, everyone can stay within the law and protect their interests.

For any inquiries, contact us legal@emirates.law or call +971 4578 6050.