UAE Property: ‘How do I assess rent for an area not on Rera index?’

The UAE law states that a landlord can only increase rent by a maximum of 20% in any one year

Not all areas in Dubai are covered under the Real Estate Regulatory Authority's rent calculator. Antonie Robertson / The National

Question: I live in a new community in Dubai that is not yet registered in the Real Estate Regulatory Authority’s rental index.

My lease renewal is coming up next month. Is the landlord allowed to increase the rent and if yes, by how much? FH, Dubai

Answer: Your case is not so straightforward to determine given there is no set standard within the rent calculator, so it’s all about negotiating.

It is true that rents increased in 2023 and if reports are to be believed, the figure is about 19 per cent.

That said, this is a general figure and not specific to any area. It could be that some areas have experienced higher or lower increases.

If you and your landlord can agree on a figure that is reasonable for an increase, this can be the basis of the renewal. Sooner or later, the rental calculator will be updated to take into consideration your zone.

Decree 43 of 2013 states that 20 per cent is the maximum percentage an owner can request in any one year, so I guess this figure could be used as a maximum figure in your negotiations.

Unfortunately, you will have to weigh up what it could cost you to move elsewhere, should you not agree with the new rate set by your landlord.

A good business relationship between the tenant and landlord is paramount for future living and negotiations, so keep this in mind when deciding to dig your heels in or not.

Q: I legally delivered a 12-month eviction notice to my tenant in January as I want to sell the property. His tenancy contract is valid until July.

The tenant has decided to vacate in March, thereby terminating his tenancy contract early. He has asked me for money as compensation to move out as he feels the property will sell faster if vacant.

The compensation includes refunding the security deposit, a portion of the moving costs and a percentage of the estimated difference in rent.

If my property does not sell and if I decide to re-let the property, can the existing tenant file a case against me?

I have no intention of evicting the tenant to get a higher rent, but if the property does not sell in a few months, I may have to re-let it. ZJ, Dubai

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A: My advice to you would be to go ahead with the compensation agreement with your current tenant.

Add a clause that in the event that you do not sell the property, you should be able to get a no objection letter from the tenant, effectively granting you permission to re-let the property.

If you have compensated the tenant due to the proposed eviction, he shouldn’t have an issue giving you this document and will not be able to claim additional compensation through the Rental Dispute Settlement Committee further down the line.

Q: Our landlord, who is based in Turkey, is not accepting rent payments from his agent and has served us with a 30-day eviction notice due to non-payment.

We went to the Rera and they asked us to register an “offer and deposit” case.

We are waiting to see what happens as the landlord has not responded to the Rera either.

The agent has now returned some of our payments, but not the amount the landlord is saying has not been paid.

What do we need to do to safeguard against eviction? Should we also raise a police case? ST, Dubai

A: Your case is tricky and not easy to advise upon. However, the offer and deposit scheme is a good start to your proceedings.

Going to the police is only advisable if you are saying that the agent has stolen the amount in question and then you are only dealing with the missing amount.

If the agent can prove the missing money has been sent to the landlord, then the police would not interfere.

Your only other course of action would be to file a case at the RDSC to find a solution.

Mario Volpi is the sales director at AX Capital. He has worked in the property sector for 40 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]