Question: I have been renting a villa in Dubai for the past three years, and my tenancy contract is due for renewal in a couple of months. My landlord has just informed me that he intends to increase the rent by 15 per cent, which seems excessive.
I checked the Real Estate Regulatory Agency’s rental index, and according to it, my current rent is already within the acceptable range for similar properties in my area.
I’ve raised this with my landlord, but he insists on the increase and says if I don't agree, he will not renew the contract. I’ve always paid rent on time and maintained the property well. Do I have any legal recourse in this situation? Can he evict me just because I’m not agreeing to the rent hike? CT, Dubai
Answer: Under Dubai's tenancy laws, specifically Law No. 26 of 2007 as amended by Law No. 33 of 2008, landlords cannot arbitrarily increase rent beyond what is permitted by the Rera. The new smart rental index is the official tool that governs permissible rent increases and any proposed rise must fall within the parameters it outlines.
If your current rent is already within the acceptable range compared to similar properties in your area, and the index confirms that a 15 per cent increase is not justified, then the landlord cannot legally impose such a rise.
Furthermore, the landlord must provide a minimum of 90 days’ written notice before the renewal date if he intends to amend any terms of the contract, which obviously includes the rent. If he has failed to do so within this time frame, the existing terms – including the current rent – will automatically carry forward into the new lease term.
Regarding eviction, the law is clear: a landlord can only evict a tenant for specific reasons, such as wanting to move in themselves or to sell the property. These reasons must be supported by proper documentation. Even then, they are required to provide at least 12 months’ notice through a notary public or registered mail.
In your case, if the landlord is threatening to evict you purely because you are not accepting an illegal rent increase, this would not stand in front of the Rental Dispute Settlement Centre (RDSC). You have every right to challenge such a demand and I would encourage you to gather all communication in writing and, if need be, file a complaint with the RDSC to uphold your rights.
Q: I’m based in London and am considering buying a property in Dubai as an investment. While I’m familiar with the sale prices, I want to make sure there are no hidden costs or taxes that could catch me off guard.
What additional costs should I expect when purchasing a property in the UAE, especially in terms of government fees, taxes and continuing expenses? GC, London
A: The UAE, and particularly Dubai, remains one of the more attractive property markets globally due to its relatively low transaction costs and absence of annual property taxes. However, there are still several upfront and continuing costs you should be aware of:
Upfront costs
- Dubai Land Department (DLD) fees: This is the most significant government-related cost. The DLD charges a 4 per cent transfer fee on the property’s purchase price, plus an administration fee (typically Dh580 for apartments/villas).
- Agency commission: If you use an estate agent, expect to pay around 2 per cent of the purchase price as a commission.
- Trustee office fees: These are the service centres that process the legal transfer. The cost is around Dh4,000 for properties above Dh500,000 (and Dh2,000 for those below that threshold).
- Mortgage registration fee: If you're borrowing to buy, the DLD charges 0.25 per cent of the loan amount, plus Dh290 in admin fees.
- Valuation fee (for mortgages): Lenders typically charge around Dh2,500 to Dh3,500 for property valuation, paid by the buyer.
- Developer’s NOC fee: For secondary market purchases, the developer must issue a no objection certificate (NOC) to transfer ownership. This usually costs between Dh500 and Dh5,000, depending on the developer.
Continuing costs
- Service charges: These are annual fees paid by property owners to maintain the building or community (covering cleaning, security, landscaping, etc.). Charges vary widely by project and are calculated per square foot.
- Maintenance/repairs: These are not regulated and depend on the age and condition of the property. It’s wise to budget for unexpected repairs.
One of the major benefits in the UAE is that there is no annual property tax on owned real estate or any tax on selling the property either, making it an appealing investment environment. That said, if you let the property, you may need to consider income from rent in your home country’s tax filings, depending on your residency status and tax obligations abroad.
In conclusion, while there are no hidden taxes, the combined cost of these fees can total between 7 per cent to 8 per cent of the property price, so it's important to budget accordingly.
The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to mario@novviproperties.com
