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New tenants in Sharjah will benefit most from updated rental rules

Apart from 3-year no rent hike, they can work with landlords in advance on new terms



Sharjah residential rental space is having an extremely good year. The new rules on leasing will now come in handy for tenants and landlords alike.
Image Credit: Balaram Menon/Gulf News

Dubai: Clarity on longer term rental obligations is one of the key features Sharjah residents who just moved into a new home will have from the emirate’s new rules on the entire leasing process.

The best part for these new tenants is that Sharjah has retained the first 3 year no rent hike clause in the new rules as well. Plus, tenants also have another key clause to help them through their future negotiations with landlords, real estate sources say.

If the tenant decides to accept an increase in rents before the first three years are up, the landlord cannot increase it until a further two years have passed’.

If used right, this clause will be a major factor in helping tenants have a clear-cut view on what they would have to pay more as rent – with the bonus that they have a rent lock-in for the additional two years.

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So, a tenant could decide to agree on a rent hike at the end of two years in that 3-year cycle, which will then cushion him from any more for a further two years from the new agreement. 

For landlords, having long-term tenants who treat the property as their home offers benefits such as stable rental income and reduced vacancy periods.

- Muhammad Ikhlaq of Betterhomes.

If Sharjah residential rents keep increasing, a ‘tenant will do well to enter early negotiations with their landlords on what the new increase should be’, said a leading agent. “Then, if the terms are agreed, this way the tenant will actually end paying less rather than negotiate with the landlord at the end of the no-rent hike first 3 years.”

Both tenants and landlords thus have a clear line of sight on rental commitments, estate agents add.

“The new Sharjah rental law reinforces regulations for both tenants and landlords, ensuring stability and clarity,” said Muhammad Ikhlaq, Sales and Leasing Manager at Betterhomes. “Traditionally, rental hikes in Sharjah have followed a long-term approach.

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“From a tenant’s perspective, renting long-term in Sharjah allows them to experience the emirate’s unique lifestyle while enjoying price stability, making it an appealing option.”

Major intake of new tenants
As Sharjah's property market recorded more completed apartment buildings and villas, leasing activity has had one of the busiest years in recent times, ensuring even the summer weeks were quite hectic. Sharjah's new rules on leasing is a chance for those who shifted homes in the last two years to start working on new terms for a lease extension. And benefit from it.

The new rules will do much to reinforce that. In the year to date, rents in Sharjah have seen 10-30 per cent increases across the board even as new apartments and villas got built and handed over. (Currently, the Sharjah property market is recording some of the biggest demand from end-user buyers in the UAE, and it can easily absorb far more offplan launches than is happening now.)

In new buildings and communities, apartment rents have risen by 30-35% and villa rents by up to 40% over the past 12 months.

“This upward trend is likely to continue as new properties are sold at progressively higher prices, pushing landlords to maximize returns on their investments,” said Ikhlaq.

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In contrast, older developments have seen a more moderate increase of 15-20%, offering larger living spaces at more affordable rates. Their prime locations, particularly in western Sharjah near the coastline and Dubai, contribute to the strong demand.”

Is the rental gap getting wider?

These days, a landlord with a new apartment or villa to rent out will find himself in a much better situation. The rental price gap between old and brand new homes in the emirate is at a sizeable 40-50%, with ‘new villas in particular commanding higher rates’.

How much can Sharjah landlords increase rates by?

In situations where tenants are coming to the end of their 3 year no-hike period, landlords can jack up rates on a ‘fair rent’ basis.

The executive regulations based on the new law shall ‘specify the controls for the fair rent and how to calculate it’. Again, landlords and tenants alike get that clarity on where rents are headed.

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“For landlords, having long-term tenants who treat the property as their home offers benefits such as stable rental income and reduced vacancy periods,” said Ikhlaq. “This also avoids the hassle of finding new tenants frequently, ensuring property care and maintenance.”

That’s exactly what all stakeholders in the Sharjah real estate market would want.

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