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By how much can rent be hiked in Dubai?


15-Oct-2012

Rents are going up in Dubai and are likely to go up further by the end of the year. Many residents in Dubai, who were breathing easy as rents came down, fear a repeat of 2008, when greedy landlords would jack up the rents arbitrarily.

However, this should not be the case as there are legal clauses in place for rent hikes in the city. According to legal experts with top firms in Dubai, landlords are allowed hikes which are set out as per government guidelines.

For those tenants who can foresee rent hikes on the property they are living in, this is what they should consider. First, they need to look at the time when they signed the lease of the property.

According to Andrew Thomson, Senior Associate at Clyde & Co, the hikes will depend on when the tenant moved into the property and there are two slabs for this.

“For properties leased prior to January 2011, no increases will be permitted if the rent is less than 25 per cent of the average rent for similar property in the same area. If it is more than 25 per cent, then there is a staggered permitted increase ranging from 5 per cent to 15 per cent.

“For those leased after January 2011, if a landlord wants to increase the rent, he has to inform the tenant at least 90 days before expiry of the current tenancy period (unless the parties agree otherwise),” he told


Rent hike slabs as per law

According to Decree No. 2 of 2011 on rentals in the Emirate of Dubai, the landlords can increase the rent as below.
Article (1)

The maximum rent increase percentage of property units in the Emirate of Dubai leased before the enforcement of this Decree shall be as follows:

A - There should not be any rent increase, if the rent for the real estate unit is up to 25% below the average similar rent.

B - If the rent value was 26% to 35% less than the average similar rent; the maximum rent increase shall be equal to 5% of such value.

C -If the rent value was 36% to 45% less than the average similar rent; the maximum rent increase shall be equal to 10% of such value.

D - If the rent value was 46% to 55% less than the average similar rent; the maximum rent increase shall be equal to 15% of such value.

E - If the rent value was less than 55% of the average similar rent; the maximum rent increase shall be equal to 20% of such value.

Article (2)
For the purpose of this Decree the similar rent value of the property unit means pursuant to “The Rent Index of the Emirate of Dubai” approved by RERA.

Article (3)
This Decree shall be enforced from the date of its issuance and shall be published in the Gazette.





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