Homefront: ‘Can my landlord increase the rent without serving the 90-day notice?’

The Dubai resident claims the rent increase also exceeds the Rera calculator’s estimate

Rental increases in Dubai are covered by Decree Number 43 of 2013. This decree outlines by how much a landlord can increase a property’s rent at contract renewal, after serving the 90-day notice in writing. Getty Images
Rental increases in Dubai are covered by Decree Number 43 of 2013. This decree outlines by how much a landlord can increase a property’s rent at contract renewal, after serving the 90-day notice in writing. Getty Images

I currently pay rent of Dh110,000 a year in four cheques for a property in Dubai. My rental lease is due for renewal towards the end of April. My landlord has been trying every possible means to increase my rent.

In December, the landlord’s real estate representative called to check if I intended to renew my rent agreement. I said I was unsure as the market seemed like it was still heading down, but advised him to call back closer to the 90-day deadline. The agent never called me back.

With 76 days remaining to contract renewal, the landlord mailed me directly, seeking to increase the rent to Dh145,000 and claimed she had been receiving rent offers for this amount.

I politely declined, citing tenancy laws regarding contract amendments only with a 90-day notice and the Real Estate Regulatory Agency calculator regulating rent increases.

As per the Rera calculator, my landlord is allowed to increase rent by only Dh5,500 upon renewal and if the notification is served 90 days before contract expiry.

I am willing to pay the higher rent as per the Rera calculator, however she refused to negotiate below Dh145,000.

A week later, my landlord said she could not serve the 90-day notice for a rent increase because she contracted Covid-19. That is no excuse because I contracted Covid-19, too. She could have asked for a rent increase well before time. I refused her demand.

Her real estate agent then demanded the rent increase and I declined again. Later, someone claiming to be my landlord’s husband contacted me, saying she wanted to take possession of the property to live in. I said eviction is only possible after serving a 12-month notice.

I reminded him that if she evicts me to take possession of the property, she cannot rent it for two years, or I will be eligible for potential compensation.

Filing a case at the Rental Dispute Settlement Centre attracts a fee of 3.5 per cent of the rental amount

Mario Volpi

I have now received a notice from a law firm stating that my landlord was legally right in asking for a rent increase. The law firm selectively cited parts of the law stating rent increases were allowed, but avoided referring to the portion that says tenants and landlords must refer to the Rera calculator for a rent increase.

Although I understand this is all a smokescreen, where do I stand with regard to the law? How do I respond to the legal firm’s letter?

Additionally, this case looks like it will go to the Rental Dispute Settlement Centre, where I have to pay a 3.5 per cent fee to lodge a complaint. Can I reclaim this fee from my landlord? NP, Dubai

It is clear to me that you have a very good grasp of the law that governs the relationship between landlords and tenants.

This is Law 26 of 2007, however it was updated by Law 33 of 2008, which amended certain provisions of the former law.

All these laws can be found in their entirety on the internet for further clarification.

Rental increases are covered by Decree Number 43 of 2013. This decree outlines how much a landlord can increase a property’s rent at contract renewal after serving the 90-day notice in writing.

You are correct that it is the Rera rental calculator that determines how much rent can be increased in a given year.

Any law firm knows what is permissible by law. I can only assume the lawyer’s letter is aimed at you in the hope that you are not aware of these laws.

Filing a case at the RDC attracts a fee of 3.5 per cent of the rental amount. Often, but not always, the judge will award costs to any successful application.

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

Published: April 1, 2021 08:00 AM

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