Rent increases in accordance with RERA law

In Dubai, the implementation of rent increases under RERA law is subject to strict regulations laid down by the Real Estate Regulatory Agency (RERA). RERA is responsible for regulating the property markets in Dubai and promoting fair practices between landlords and tenants. When renting residential and commercial property, it is important for both parties to be aware of the applicable laws to avoid unexpected conflicts.

What is the RERA Act?

The RERA law, also known as the Dubai Tenancy Law, sets out specific conditions under which rent increases can be made. These regulations are part of the government’s efforts to protect the rights of tenants while ensuring that landlords are not penalised.

Rules for rent increases

Under RERA, landlords are only allowed to increase rents under certain conditions. This usually happens at the following times:

• At the end of the agreed rental period, usually after one year.
• At monthly or annual intervals specified in the tenancy agreement.

Maximum rent increase

The maximum amount of rent increase is also limited by the RERA Act. These regulations include:

• If the rental price is up to 10 % below the market price according to the rental agreement, the rent may be increased by a maximum of 20 %.
• If the rent is more than 10 % below the market price, the increase may not exceed 15 %.
• If the price is increased to the level of the market price, a maximum of 10 % is permitted.

How is the increase notified?

Landlords are obliged to apply for rent increases in writing and inform tenants at least 90 days in advance. This notification should include the following information:

• The new rent amount.
• The reason for the increase.
• The date on which the rent increase will take effect.

Legal remedies in the event of disputes

If a tenant disagrees with the rent increase, they have the right to dispute the rent increase with the Dubai Rental Dispute Centre. In such cases, a mediated solution is sought before a court decision is reached.

Illustrative example on the topic: Rent increases under the RERA law

Imagine Anna rents a flat in Dubai for AED 50,000 a year. After a year, the landlord informs her of a rent increase of AED 5,000, based on market prices. Anna has heard in advance about the rent increases under the RERA law and knows that this is considered reasonable as her flat is still below market rate. After receiving the notice of increase and meeting the 90-day deadline, she decides to accept the increase and plans to sign a new tenancy agreement. The example shows the importance of understanding the RERA regulations to ensure a smooth and fair letting.

Summary

Rent increases under RERA law are an important aspect of the Dubai housing market that affects both tenants and landlords. A comprehensive understanding of these regulations will help avoid misunderstandings and legal conflicts. Both tenants and landlords need to be aware of the legal framework in order to maintain a harmonious and equitable relationship.