Dubai Rent Hikes: How Tenants Can Effectively Negotiate Unfair Increases

Shahba Mayyeri -

Question: I’m a tenant in Dubai who has received a rent hike notice that I believe is unfair. With the recent launch of the smart rental index, how can I use it to negotiate a better rate?

Answer: In Dubai, the allowable rent increase is determined based on the average rent of similar properties in the area, as outlined in Article 1 of Decree No. (43) of 2013. This decree specifies the following guidelines for rent increases during contract renewal:

  • No rent increase if the current rent is up to 10% below the average rental value of similar units.
  • A 5% increase if the rent is 11% to 20% below the average.
  • A 10% increase if the rent is 21% to 30% below the average.
  • A 15% increase if the rent is 31% to 40% below the average.
  • A 20% increase if the rent is more than 40% below the average rental value.

The "average rental value" is determined using the Dubai Rent Index, which is approved by the Real Estate Regulatory Agency (RERA), as per Article 3 of the Dubai Rent Increase Law. RERA also has the authority to adjust rent increases or decreases in line with the prevailing economic conditions, as stated in Article 10 of Law No. 26 of 2007.

When renewing a contract, landlords and tenants may negotiate changes to the rent. If they fail to reach an agreement, the Rent Disputes Center can determine a fair rent based on specific criteria. Both parties must notify each other of any proposed changes at least 90 days before the contract expires, as per Articles 13 and 14 of Law No. 33 of 2008.

If the landlord provided the required 90-day notice and the previous index supported the increase, but the new index does not, the applicable index will depend on the renewal date. For contracts renewed before 2025, the old index applies, while contracts renewed in 2025 will follow the new index.

Thus, your landlord can only increase the rent if it complies with the RERA index and with proper notice. In case of a dispute, you can approach the Rental Dispute Center for resolution.

News Source: Khaleej Times