Rents in Dubai: Rent valuation service from Land Department helps resolve landlord-tenant disputes

Dubai: The rent valuation service offered by Dubai Land Department is fast emerging as key to breaking any logjam in lease negotiations between landlords and tenants. According to market sources, the valuation gets done within days and, these days, is taken as the final verdict by all parties involved in rent negotiations.

“We are talking about the process getting completed in about 7 days,” said a landlord who has in the recent past used this service – available through Land Department’s REST app – to close out agreements with tenants. “The valuation is done by a respected third-party – DLD – and made up of officials who have sufficient knowledge of rental market dynamics and valuations.”

The cost involved is on the higher side, starting from Dh2,000 and up to Dh10,000. All types of rental properties are covered, including retail outlets and offices. But it’s on the residential that the service is finding the highest usage.

Landlords who feel that current rents on their apartments or villas are much lower are using the valuation services. So too are tenants who feel the hikes demanded by their landlords are above the average for that building/area.

Less expensive

“Rather spend the Dh2,000 to get a fair valuation rather than have to spend much more on relocating to a new apartment,” said one tenant, who was able to rework the lease terms with her current landlord after the valuation. “The valuation ended up as a win-win for both parties.”

The need for valuation is rife after Dubai’s residential rents went through a 20-25 per cent increase since mid-June 2021. Only a handful of locations managed to experience a less sharp increase, but even there rents are gaining in recent weeks, market sources say.

Rental Index

The Land Department valuation service has also become handy for landlords who believe the Dubai Rental Index doesn’t quite reflect the changes the market has gone through in these near two years. According to them, the Index scores are still stuck at around 2018-19 rates.

“So, when a valuation gets done on what the ideal rent should be now, it helps landlords ask for a fair hike during renewals,” said a market source. “Once the valuation gets done, that revised rent would become a sort of de facto standard for that area.

“The rental market requires balance and the Land Department service offers that.”

Rental Court

The valuation service along with the long-standing Rental Disputes Centre solidifies Dubai Land Department’s role as being the final word on rental issues. The rush continues to get verdicts delivered by the RDC, as Dubai experiences the fastest rate of rent increases since 2016-17.

“The valuation service is primarily for properties with existing leases,” said a market source. “Because if it’s a brand new unit, the landlord can set a rental he believes is in sync with the market trends.

“But on existing leases, the chances of disagreements over what the revised rent should be will always be there. The valuation by the DLD helps clear the air, relatively quickly.”

More landlords and tenants in Dubai are finding this to be the case.