UAE Property: ‘Can my new landlord raise the rent by 50%?’

Under the law, the maximum rent increase a landlord can charge is capped at 20%

The maximum rent increase a landlord can charge in any given year is 20 per cent. Even then, certain criteria must be met. Getty Images

Question: I am a tenant in Dubai and my rent contract expired on September 24.

On September 20, I received an email from a property management company to visit their office in Dubai for contract renewal talks.

However, upon visiting the office, I was informed that my contract would be renewed with a 50 per cent increase in rent.

I have not received any official documents notifying me of a rent increase.

I informed the company that according to Dubai law, a landlord cannot raise the rent with only four days’ notice.

I also said that no increase was applicable to my apartment, based on the Real Estate Regulatory Agency’s rental calculator.

However, the owner’s agent said the building had been taken over by new management a few days ago, hence the 90-day notice would not be applicable in this case.

He added that the rent had been adjusted based on instructions from a bank, hence no there was no scope for negotiation.

I want to know my rights as a tenant. I am very worried since my tenancy contract has already expired but I am still staying in the apartment. AK, Dubai

Answer: Any new buyer of a rented property takes over the tenancy contract in its entirety.

Therefore, if they bought the property with no chance of serving the mandatory 90 days’ notice for a rent increase, they cannot make any changes to the contract.

Their excuse of buying it only four days before is not valid. Given this, no increase in rent is allowed and no changes can be made to the contract until next year’s renewal.

Requesting a 50 per cent increase in rent is also not allowed as the maximum rent increase a landlord can charge in any given year is 20 per cent. Even then, certain criteria must be met, according to Decree Law No 43 of 2013.

I believe you have a strong case, so I would urge you to open a file at the Rental Dispute Settlement Committee, which will cost you 3.5 per cent of the rental amount.

Dubai's most expensive home on sale for $204 million – in pictures

A mansion in the Emirates Hills area of Dubai has been put on the market with a price tag of Dh750 million. All photos: Luxhabitat Sotheby's

Emirates Hills is a gated community to the south of Dubai Marina, with security personnel and checkpoints to guard some of the Middle East's wealthiest residents

The property - nicknamed the Marble Palace by the selling agents - was built using an estimated Dh80-Dh100 million worth of Italian marble

The pool area is the size of a hotel spa

The property arrives on the market as the city experiences one of the world's biggest property booms

Construction took nearly 12 years and was completed in 2018

'It’s not everybody’s taste or style,' Luxhabitat Sotheby’s broker Kunal Singh says, acknowledging that buyers will either love it or hate it

Amenities include a 15-car garage, 19 bathrooms, a power substation and panic rooms

The owner, a local property developer, declined to be named

Q: I was renting an apartment in Dubai and my tenancy contract was up for renewal on October 1.

However, my landlord did not send me a rent increase notice. When I sent him an email asking about renewing the rent agreement, he did not reply.

I went to his office and was informed by his manager that there would be a 10 per cent increase in rent, as permitted by the Rera.

I told him that the landlord did not notify me of the rent increase two months before the contract's expiration.

When I refused to pay the 10 per cent rent increase, my landlord asked me to vacate the apartment after paying a penalty of two months’ rent.

I was paying an annual rent of Dh60,000 ($16,337), so I would have to pay a penalty of Dh10,000.

I asked the landlord to renew the contract for six months but he refused. I paid him the penalty and vacated the apartment.

Since my landlord neither sent me a rental increase notice nor replied to my email, I want a refund of the penalty. What should I do? SS, Dubai

A: I am sorry to hear about your situation, as numerous errors have occurred.

Firstly, no changes to a rental contract can be made unless at least 90 days’ notice is given from the renewal date.

This is regardless of the Rera rental calculator stating that an increase is allowed.

The landlord simply cannot demand your eviction. Based on this circumstance, the penalty charge is also illegal because I fail to see what the fine is for.

I suggest you open a case at the RDSC for compensation and illegal eviction.

Mario Volpi is the sales director at AX Capital. He has worked in the property sector for 39 years in London and Dubai. The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to [e-mail]