Business | Property
Rent cap in Dubai ends with new decree in place
The Dubai Rent Committee has stopped enforcing the five per cent rent cap rule.
- By Ashfaq Ahmed, Chief Reporter
- Published: 22:58 January 20, 2009
Dubai: The Dubai Rent Committee has stopped enforcing the five per cent rent cap rule immediately following the issuance of the new rent law on Monday.
"We are no longer entertaining complaints based on the five per cent rent cap law as the new law is being enforced with immediate effect to deal with any rental dispute cases," said Mohammad Al Shaikh, Secretary-General of the committee.
He said the new law would be elaborated on and would help solve most of the cases amicably. However, he said it would take the rent committee a few days to draw up a strategy to implement the new law.
According to the new law, rents for home or commercial properties cannot be raised this year if they were equal or up to 25 per cent lower than the average market rate. The new law came into effect after a decree was issued on Monday by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. The guidelines for the rental index have already been issued by the Dubai Real Estate Regulatory Authority.
Dubai was the first to introduce a 15 per cent rent cap on annual rent in November 2005 in the wake of spiralling rents of residential and commercial properties.
The rent cap was reduced to seven per cent in January 2007 to control the rental market. It further helped protect rights of not only the tenants but also the landlords.
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Another two per cent reduction in rent cap was introduced last year when the rent hike was capped at five per cent to further consolidate the rental market and to control inflation.
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