Dubai property boom: Tenants' rights and Rera's rent calculator explained

A complex area average system is just one aspect of government-imposed rent controls

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A version of this article was first published in April 2022

Confusion often reigns over tenants' rights.

As the property market makes a strong rebound from the pandemic, it has raised many questions about tenancy do's and don'ts.

This year, Dubai's property market recorded its strongest start in more than a decade for both sales and rents.

As a result, some landlords have tried to enforce large increases in annual rental prices, after several years of falling prices. It has left some tenants no choice but to pay up or leave.

While there are laws in place to protect both the tenant and landlord in the UAE, Mario Volpi, sales and leasing manager for Engel & Voelkers, said establishing good landlord-tenant relationships can be the best way to avoid to messy disputes.

Here, The National explains how to be in-the-know as a tenant renting in Dubai.

I am a tenant but my landlord wants to sell the property

The rights of the tenant remains, irrespective of whether the property they are living in is for sale or not.

If a landlord chooses to sell a property that is being leased by a tenant, the terms of the contract remain intact, said Mr Volpi.

To evict an existing tenant, the landlord must provide one of four reasons as to why they are doing so before putting the tenant on a 12-month eviction notice.

Qualifying reasons for eviction:

  • If the landlord wants to sell the property
  • If they wish to move into the property, or wish to move immediate family into the property, provided the landlord does not own a suitable alternative property for that purpose (evidence provided in advance)
  • If the property requires extensive modernisation work that would prevent the tenant from living in it while the work is being carried out (evidence of plans or approvals for work provided in advance)
  • If the property needs to be demolished (evidence provided in advance)

“These are the only four reasons where a landlord is permitted to evict a tenant,” said Mr Volpi.

“Technically speaking, Law 33 of 2008 states that a 12 month written notice of eviction should be served upon expiry of an existing tenancy agreement.

“That means if a tenant is part way through a yearly contract, the 12-month eviction notice can only be given at the end of that contract, which means the tenancy contract can, in theory, be extended for one more year.”

Dubai property prices April 2022 - in pictures

However, Mr Volpi said it has been shown in the past that some judges have allowed the landlord to give the 12-month eviction notice at any time during a contract period.

“It really is decided on a case-by-case basis, that is why I say to my clients it is best to try to reach an agreement with your landlord.”

Changes to contract and renewal policy

If the landlord wants to increase the rent, they also need to give a 90-day notice period, unless the contract states otherwise. No notice within this time frame means a landlord cannot raise the rent.

If there is no electronic or written communication served, the Dubai property rental contract is automatically renewed at the same rental price and based on the same conditions as the previous year.

Similarly, if a tenant wants to make changes to the contract such as frequency of cheques given or permission to introduce a pet into the home, they must give 90 days’ notice to the landlord.

If the landlord does not agree and neither party can come to an agreement, the tenant has to vacate the property at the end of the current contract.

Understanding the Rera calculator

Rera was established in 2013 to regulate the market and prevent it from overheating.

Its rental calculator shows whether or not an increase in rent is applicable and uses criteria such as location, property type, current rent and number of rooms. It works by comparing properties with similar ones nearby.

Tenants and landlords can have access to the calculator on the Dubai Land Department website.

The maximum percentage of rent increase for properties in Dubai depends on the area, property type and size, and current market value.

If the rental price is:

  • Below 10 per cent of the market value for the area, no increase is allowed
  • Between 11 per cent and 20 per cent below market value for the area, a landlord can increase by 5 per cent
  • Between 21 per cent and 30 per cent below market value for the area, a landlord can increase by 10 per cent
  • Between 31 per cent and 40 per cent below market value for the area, a landlord can increase rent by 15 per cent
  • Forty-one per cent or more below market value will attract a 20 per cent increase in rent

According to the Rera calculator, a landlord cannot increase the rent by more than 20 per cent in any given year.

However, if the landlord and tenant agree on a higher increase during private negotiations, rent increases can exceed 20 per cent.

Updated: June 06, 2022, 10:42 AM
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