Rent Increase Regulations in UAE

Before signing a tenancy contract in the United Arab Emirates, it is important to familiarize yourself with the tenancy contract rule of each Emirates. The tenancy laws determine the rights and regulations of and the relationship between the landlords and tenants and the law helps to minimize the dispute between the landlords and tenants. The rent increase regulations in the UAE are given below.

 

DUBAI

In Dubai, the Real Estate Regulatory Agency (RERA) has set conclusive laws to govern the relationship between the landlord and tenant. Article 4 of Law No. 33 od 2008 sets mandatory law to register a tenancy contract by the landlord or tenant with RERA. It is to ensure that the same property is not rented twice at the same time. The RERA tenancy laws regulate the rights and responsibilities between the landlord and tenant. Decree No. 43 of 2013 determines the increase in rent for the real estate in the Emirate of Dubai. The new Decree applies the landlords in the public and private sector and also includes all leases in Dubai and in special development areas and free zones such as the Dubai International Financial Centre (DIFC). Article 1 of the Decree determines the maximum percentage of rent increase for the real property while renewing the lease contracts as follows;

• No rent increase is permitted if the existing rent is less than 10% below the average market rental rate.
• A maximum of 5% rent is permitted to increase if the existing rent is between 11% and 20% below the average market rental rate.
• A maximum of 10% rent increase is permitted if the existing rent is between 21% and 30% below the average market rental rate.
• A maximum of 15% rent increase is permitted if the existing rent is between 31% and 40% below the average market rental rate.
• A maximum of 20% rent is permitted to increase if the existing rent is more than 40% below the average market rental rate.
• Article 3 of the Decree states that the average market rental rate is determined in accordance with the property rent index of the Emirate of Dubai which is approved by the RERA.

As per the RERA index, the landlord must give 90 days prior notice to the tenant if he wishes to increase the rent otherwise the tenant can approach the lawyers to file a complaint the landlord.

 

ABU DHABI

LAW No. 20 of 2006 governs the law relating to tenancy contracts in Abu Dhabi. The Abu Dhabi Law No.4 of 2010 determines that a landlord can increase the annual rent price up to 5% of the current rate, at the time of lease renewal. The landlords can increase the annual rent as per the law, provided that they must notify the tenants at least 2 months prior to the renewal of the lease contract. If the landlord increases the annual rent above 5%, then the tenant can refer the matter to the Abu Dhabi Dispute Resolution Committee which is formed to protect the rights and obligations of both parties as well as to resolve the disputes among the parties.

 

SHARJAH

The renters are protected from annual rental hikes as per Sharjah Tenancy Laws 2007. It prevents the landlords from increasing the rent within three years from the first signing of the contract and subsequently for any additional increase, two more years. Unlike Abu Dhabi and Dubai, Sharjah Tenancy Law does not deal with the percentage of a rent increase. The Sharjah Rental Dispute Committee is the authority to handle any disputes or disagreements between the landlord and tenant.

 

AJMAN

Ajman Emiri Decree No. 2 of 2017 regulates the law governing the Landlord-Tenant Relationship in the Emirate of Ajman. In Ajman, the tenancy agreements are regulated and formalized through a system called ‘Tasdeeq’. In the Emirates of Ajman, the landlord cannot increase the rent by more than 20% of the current rate. Article 6 of Decree No. 2 of 2017 states that a landlord cannot increase the rent rate for three years from the first signing of the tenancy contract. And if the landlord wants to increase the rent, he must send a written notice to the tenant at least 2 months prior to the expiry of the tenancy contract and such an increase in the rent shall not be more than 20% of the current rent.

 

RAS AL KHAIMAH

Law No. 8 of 2008 regulates the relationship between the landlord and tenant in the Emirates of Ras Al Khaimah. According to the new law of the Emirate, a landlord can increase the rent rate up to 5% for residential property and also prevents the landlord from increasing the rent for three years from the first signing of the tenancy contract. If the landlord wants to increase the rent, he must send at least 3 months’ prior notice to the tenant to increase the rent before the expiry of the tenancy contract. And the tenant may refer the matter to Dispute Committee if the rent exceeds the stipulated rate.

 

FUJAIRAH

A landlord in the Emirate of Fujairah can increase annual rent to a maximum of 5%. After completing the first three years, the landlord can increase the rent every two years. The Legal Affairs Department is the authority responsible for solving any disputes or disagreements arising between the landlord and tenant.  Article 10 states that the landlord must inform the tenant in writing his interest in increasing the rent at least two months before the expiry of the tenancy contract.