Dubai tenants get more clarity on rent increases along with 90-day notice

Dubai: The minimum 90-day notice period for Dubai tenants to be told about a rent hike for the next lease renewal is the most compelling part of the latest Dubai Land Department announcement.

But there are other aspects too that tenants will find useful in their lease negotiations with landlords.

For instance, if the landlord had asked for a certain rent increase, the tenant needs to keep this in mind:

* Whether under the new Dubai digital Rental Index, the rent hike is valid.

* Or whether the rental increase demanded was based on the previous Rental Index Dubai was following. (That index, where updates were done annually, was scrapped earlier this year and the new real-time rental tracker went live.)  

Because the renewal date when the contract went into effect will determine which index – and rent increase – applies.

The Dubai Land Department has mandated:  

* The earlier Dubai Rental Index will be applied if the contract was renewed before 2025.

* The new Index will be enforced if the contract is renewed during 2025.

Thus, tenants are relatively clear about what they are supposed to be paying more. (There will of course be those landlords demanding far more than they are allowed. In such cases, it’s up to the tenants to decide whether they want to raise this with the Rental Disputes Center or just seek a new place to rent out.)

“Most Dubai landlords are upgrading their properties for better maintenance, ‘smart home’ features, which ultimately will push rents higher,” said Parag Parekh, owner of Property Pro Real Estate Brokerage.

“Rental contracts done in 2025 will see a decent hike, as most buildings in Dubai qualify for increases based on factors like structural integrity, maintenance, available facilities, and other factors.”

Now, there will also be buildings that would have ended up lower in the new star rating system forming the current Dubai Rental Index. If so, those tenants cannot be subjected to the higher rental increases from their landlords. If they are, then they have reasonable cause to put this to the Rental Disputes Center.

“Some of the older buildings even in Dubai Marina with outdated services might see no increases on the rent,” said Rachna Bhatia, Managing Director at One Stop Reality. “(Tenants could) even have a drop in rents based on the building’s classification under the star rating.

For reassurance, tenants must not forget to check the RERA Rental Index on the Dubai Rest app to see what sort of increase is mandated for their building.

Confirmation of the minimum 90-day notice period plus other factors such as a building's star rating should provide tenants with ample clarity on what they might be paying next as their rental increase.

Most important, what the landlord is asking for is justified or not.