Question: Is the Dubai rental star rating system, introduced by the Dubai Land Department in January, fully implemented on buildings where applicable?
Can a landlord demand a rent increase for a unit in a building that has not yet been allocated a rental star rating, especially when any hike is not justified according to the DLD’s rent index? AT, Dubai
Answer: Unfortunately, I’m not in a position to confirm if the rating system is operational for 100 per cent of available buildings because rating every building in Dubai is a huge task, but the DLD is updating it on a regular basis.
The rental index currently applies only to residential buildings, although extensions to commercial, retail and industrial properties are planned for a later date.
Visibility of a building’s star rating is currently limited to the owner only. However, there are discussions about making it available to tenants eventually.
If a building has not yet been rated, it should still fall into the rental index system. However, until the star rating is finalised, the system may show “no data”.
In practice, a landlord cannot simply impose a rental increase in the absence of a rating. The DLD states that an unrated building is treated as unclassified, meaning that the old rental rates apply temporarily until the classification is completed. This means the old rent cap rules are applied as a fallback.
The landlord will need to inform the tenant at least 90 days before renewal in case they wish to increase the rent. Landlords can request an increase only if the current rent is significantly below the index value. They cannot bypass the index, and any proposed rent increase should still comply with DLD official calculations.
If the building is not rated yet, the tenants are allowed to challenge the increase through the rental dispute settlement committee (RDSC).
In short, a landlord can only ask for a rental increase if the DLD system, either the new star rating or fallback index, shows one is allowed. If the building is not yet classified, the landlord must follow the older Rera rent cap rules until the building is officially rated. They cannot arbitrarily raise the rent just because the rating is pending.
Q: My landlord evicted me on the grounds of selling the property. However, after my eviction, the property was instead gifted to a first-degree relative and has since been re-let at the prevailing market rent.
How is this scenario viewed under the current legal framework, and do tenants have any recourse in such situations? YB, Dubai
A: The legal grounds for the eviction of a tenant are for reasons of sale, for landlord‘s personal use or first-degree relative, for major refurbishment or lastly, demolition.
Given that your reason for eviction was under the grounds of sale, but then the property wasn’t sold, instead gifted to a first-degree relative, this is not the same as a sale.
After transfer of ownership, the property is re-let to someone else rather than being occupied by the first-degree relative. This could be viewed as a bad faith eviction.
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The RDSC will look at the substance behind each case, not just the paperwork. If a landlord removes the tenant under the pretext of a sale, but never actually sells but instead goes on to re-let for profit, this could be deemed as misuse of eviction grounds.
It has been shown that in the past, some landlords that re-let too quickly after evicting for reason of personal use or wishing to sell, have in some cases been found to be in breach and ordered to pay compensation to the former tenant.
You would be in your rights to file a case at the RDSC for wrongful eviction, where you could be entitled to some compensation. This compensation is typically linked to damages suffered, often calculated as the difference in the rental value if the tenant had to rent elsewhere at a higher price or possibly even up to the value of the whole year‘s rent. The landlord could also be restricted from raising the rent on that unit in the future, too.
Gifting to a relative is not seen as a sale under the Dubai tenancy law. So, if the property is re-let to a new tenant after your eviction, this will probably be seen as bad faith. You would be within your rights to file a case at the rent committee.
The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to mario@allegiance.ae
