A version of this article was first published in April 2022
Confusion often reigns over tenants' rights.
This year, the UAE’s commercial property sector recorded the highest demand for occupancy in the second quarter since 2014.
As the Dubai property market continues its strong rebound from the pandemic, some landlords have tried to enforce large increases in annual rents.
This has prompted many tenants to try to better understand their rights, especially when it comes to rent increases.
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 – and to understand how much your landlord can legally raise the rent using the Rera rent calculator.
Landlord wants to sell the property
If a landlord chooses to sell a property that is being leased by a tenant, the terms of their contract remain intact, said Mr Volpi.
To evict an existing tenant, the landlord must give one of four reasons 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 (with 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 (with evidence of plans or approvals for work provided in advance)
- If the property needs to be demolished (with 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 partway 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.”
However, Mr Volpi said that in the past 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.”
Landlord wants to increase the rent or make changes to the contract
If the landlord wants to increase the rent, they need to give 90 day's notice, unless the contract states otherwise. No notice within this time frame means they 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 introducing 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.
Rera calculator: How to use it to calculate rent increase
Rera was established in 2013 to regulate the market and prevent it from overheating.
Its rental calculator shows whether or not a rent increase 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 Dubai properties depends on the area, property type and size, and current market value.
If the rental price is:
- Less than 10 per cent below 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.