UAE property: Does the DLD’s rent valuation supersede Rera's index?

The valuation certificate focuses on a vacant property rather than evaluating rent from an existing tenancy agreement

In a rising rental market, it is normal for a property owner to try to maximise their investment, but some landlords go too far. Antonie Robertson / The National
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Question: My landlord is demanding a 54 per cent increase in rent for his property in Dubai during our tenancy renewal, while the Real Estate Regulatory Agency (Rera) index shows that no rent hike is allowed.

I forwarded the Rera index findings to the landlord and asked him to adjust his rent proposal in line with it.

He declined and instead said the rental valuation certificate from the Dubai Land Department (DLD) was the standard.

I visited the DLD and Rera offices. They advised me to reiterate to the landlord that rental valuation certificates (issued by the DLD) are for vacant properties and do not trump law 43 or the Rera index, which applies to rented properties.

We communicated this to the landlord on October 25. We have still not heard from him, despite numerous reminders.

We are now wondering what our next step should be, given that we are now within the 60-day window as our rental contract expires on January 24.

Are we in danger of being kicked out if we don’t agree to the landlord’s demands, since he appears to be ignoring us for almost two months?

Should we file a case at the Rental Dispute Settlement Committee or is it too early? Should we do it ourselves or hire a lawyer? CN, Dubai

Answer: Ignoring communication is a tactic that many people use, not just landlords, but tenants, too.

My advice is to stick to your guns and follow what the law states.

The valuation certificate provides a correct figure, but my understanding is that it focuses on a vacant property rather than a valuation of rent from an existing tenancy agreement.

There is now a large gap forming between a vacant unit’s rental valuation and one when a tenant is in situ. This is born out of the protection the Rera rental calculator offers tenants.

Requesting a 54 per cent increase is not reasonable, but before filing a case at the RDSC, it is important that you try to find a mutual solution.

In a rising rental market, it is normal for an owner to try to maximise his or her investment, but unfortunately some landlords go too far.

The rental calculator, while rudimentary, is there to act as a mechanism to stop rogue landlords from overcharging.

Next year will see a change to this current system by bringing in a grading vehicle to buildings. This should level the playing field the current process.

In the meantime, you should look to be reasonable and if this means offering a bit more than what the calculator says, then so be it.

If you can demonstrate that you are trying to resolve the rental issue by being reasonable, this could help if you eventually file a case at the RDSC.

The landlord cannot just kick you out without a judgment, which will come as a result of the hearing after filing a case at the RDSC.

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You can file the case yourself, there is no need for a lawyer.

However, the whole process is in Arabic, so you can hire an Arabic-speaking legal adviser.

Q: My landlord wants me to sign a six-month tenancy agreement with no notice period. However, I negotiated for a one-month notice period.

Before I signed the contract, my landlord changed the terms to include one month’s notice period and one month’s rent as compensation for the notice period. Is this legal? HH, UAE

A: Any contract is legal if two or more parties agree to the terms and sign it. If you do not agree, I suggest you renegotiate the one-month compensation.

There is nothing in law as such to confirm whether this is legal or not. However, it is common practice for the landlord to demand some compensation if a tenant does not fulfil the full term of the rental contract.

So, requesting one month’s rent as compensation is perfectly fine, as long as you agree to it.

Mario Volpi is the sales and leasing manager at Engel & Volkers. He has worked in the property sector for more than 35 years, in London and Dubai. The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to mario.volpi@engelvoelkers.com

Updated: May 30, 2023, 12:09 PM