This will be the natural result of a new decree issued by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. The Decree, No. 43 of 2013, sets a specific band on how the optimum rental increases that a landlord can demand while renewing leases.
Mohammad Issues Decree on Property Rent Caps in Dubai while Renewing Tenancy Contracts
Shaikh Mohammad issues decree on rent hike caps while renewing tenancy contracts
Future rent increases in Dubai will be decided by a weighted average of what properties in that particular area command rather than an arbitrary demand by a landlord. It applies equally to residential and commercial realty in the emirate.
The new rental slab will not allow landlords to raise rents on renewals if the current lease is only 10 per cent lower than the average rent of a similar property.
It will be applicable to private and public sector owned properties in Dubai, as well as — pertinently enough — within the free zones. The Decree thus brings the future setting of lease terms and renewals more in sync with the Dubai Rent Index brought out by the Real Estate Regulatory Agency.

- 5 per cent if the earlier rental is 11 to 20 per cent lower than the average rent for a similar property;
- 10 per cent if the rental is 21 to 30 per cent lower than the current going rates for properties of a similar scale;
- 15 per cent if the rent is as low as 31 to 40 per cent than comparable ones; and
- 20 per cent if a property’s rental is more than 40 per cent less than the average.
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