Rent Increase in Dubai: What Tenants and Landlords Need to Know

Reasons Why Landlords May Increase Rent

The first step to understanding the concept of rent increase in Dubai is to understand the reasons it occurs. Here are some common reasons for landlords increasing a property’s rent in Dubai: 

• In Dubai's thriving real estate market, where average rents have increased significantly, landlords may want to increase the rent to match the market rates for comparable properties.

• A high market demand for rental properties is often one of the primary reasons for rent increases in Dubai. Apartments located near various hubs and amenities often have a high demand, which in turn leads to higher rental prices. 

• The average rent increase of an apartment can heighten if a landlord decides to renovate or repair their property. This could be personal renovations in the property itself or additions to the common areas such as gyms and lobbies. 

• Inflation is also a significant driver of high rents. Landlords raise rents during inflation to cover their increased costs.

• Changes to Dubai's rent increase law can also impact rent prices. If there are new taxes on rental income, changes in property laws, or amendments to existing laws, this could lead to an increase in rent. 

Legal Framework Governing Rent Increases

Dubai rent increase laws are monitored by the Dubai Land Department’s (DLD) regulatory arm, RERA (Real Estate Regulatory Authority). RERA plays an important role in regulating the entirety of Dubai’s real estate market and ensuring that there is fairness, transparency, and stability within the market. 

One of RERA’s many roles involves overseeing rental laws in Dubai - particularly rent increases. In a dynamic city like Dubai where the market can fluctuate at any given time, RERA has the critical responsibility of ensuring that even if there are rent increases in Dubai - it does not have a drastic impact on various stakeholders (e.g. landlords and tenants). 

One of the most common rental laws in Dubai is Law No. 43 of 2014 - which governs rent increases in Dubai and the Emirates. It states that landlords can increase rent in specific situations and the percentage of rent increase must be directly linked to the difference between the current rent and the average market rate for similar properties in the surrounding area. 

Here is a breakdown of allowable rent increases according to the law:

How to Determine Average Market Rate

One of the most important tools in RERA's comprehensive legal framework around rental laws, which includes guidelines for landlords on how much to increase rents, is the RERA Rent Increase Calculator, a transparent method for determining legal rent adjustments. 

The RERA Rental Index Calculator allows you to input all the details of the property that you are the landlord or tenant of. The rent calculator then accounts for various factors, such as:

• The property location 

• The property type 

• Current market conditions 

After accounting for these factors, it offers a clear statement of the average market rate and the maximum allowable increase in rent.

Both landlords and tenants in Dubai can utilize this tool to better understand fair rent increase rates, which minimizes the chances of disputes. 

Notification Requirements

RERA also has strict guidelines on rent increase notices in Dubai, as landlords cannot hand in rent increase notices to tenants at any given time. There is a set procedure that must be followed:

• Regulations state that landlords must provide a 90-day written notice to tenants about increases in rent.

• A rent increase can only be applied at the time of contract renewal, therefore notice must come at least 90 days before the end of the contract date - if this is not followed, no rent increase is permitted and the contract can be renewed on the same terms as before.

• The notice must also comply with RERA regulations and have an amount that abides by the stipulated guidelines. 

Most tenants have a foundational understanding of rent increase notices and other tenets of Dubai’s real estate market beforehand - if they engage the services of a RERA-accredited real estate agent. With Engel & Völkers by your side during your property hunting and renting process - you will not only gain a nuanced understanding of the city’s property market but also have access to the best properties at budget-friendly rates. 

Rights of Tenants

Understanding your rights as a tenant in Dubai is important, as it can help you during conflicts and avoid unnecessary hassle. 

A written lease agreement 

When they choose a property to rent in Dubai, tenants must receive a written lease agreement. The agreement must state the terms and conditions of the tenancy, the rent amount, payment schedule, and mode, along with other clauses. This is a legally binding contract that is essential for both parties. 

Peace enjoyment 

Throughout the tenancy period, tenants have a right to peacefully reside in the property. Landlords are not allowed to enter the property without the tenant’s permission—except for emergencies. 

Repairs and maintenance 

The landlord is responsible for maintaining the property and ensuring that it is in a habitable condition. Tenants can raise requests for any damage or maintenance issues. However, the tenancy contract will likely stay that the cost of minor repairs, below a certain threshold, must be covered by the tenant, but the landlord will be responsible for any major costs.

Rent payment receipts 

Tenants must receive a receipt each time they make a rental payment to the landlord. This confirms the payment history and is an important document in the case of any conflicts between both parties. 

Due process of eviction 

Tenants have a right to proper legal procedures in case of eviction. Landlords cannot suddenly evict tenants—they must obtain a court order and follow the guidelines. 

Responsibilities of Landlords

Along with legal rent increases in Dubai, landlords have a set of responsibilities they must adhere to, including: 

• Maintaining the property and ensuring that it is in a habitable condition both before and after a tenant moves in. 

• Ensuring that normal wear and tear in a property is addressed in a prompt and timely manner.

• Returning the security deposit to the tenant upon the tenancy contract’s completion - after checking that the tenant has left the property in a satisfactory condition. 

• Providing the tenant with check-in and check-out reports. 

• Providing a secure environment and implementing basic safety measures for the tenant’s security. 

Negotiating Rent Increases in Dubai

While there are already laws on allowable rent increases and average rental rates in Dubai, tenants can negotiate the rent increase with their landlord. 

Here is how you could negotiate rent increases in Dubai:

• You can first refer to the RERA rent calculator, either on the Dubai Land Department website or the Dubai REST app, to check if the rent increase falls under a permissible limit. If it does not, you can tell the landlord that the proposed increase is prohibited by law.  

• If both parties cannot agree on a permissible rent increase, you can file an official complaint with RERA. After assessing the situation and the documentation provided, RERA will take your case and file a verdict. 

Conclusion

While average rental increases in Dubai are becoming more common, RERA, along with other regulatory bodies, is striving to ensure that the price rises don’t have a detrimental impact on either tenants or landlords. Regulations are in place to avoid excessive rent increases at the time of contract renewal.

Whether you wish to further understand rent increases in Dubai or find your dream property, Engel & Völkers is here to assist you. 

With over 45 years of expertise in the real estate sphere, Engel & Völkers is committed to helping you find your dream property in Dubai—whether you're renting or buying a villa, townhouse, or apartment.