We moved into our flat in April 2011 after moving to Dubai in January 2011 and have been very happy here. Our lease is due to expire on April 8 2012. Our landlord contacted us in January saying he wanted us to pay a 47 per cent rent increase to stay until April 2013. We refused this because we cannot possibly afford it so he issued us with an eviction notice saying he wished to move into the property himself.
We resigned ourselves to moving but he contacted us again last month offering us a 30 per cent rent increase which we again refused because we have been told since he tried to impose the first increase that landlords in Dubai are not allowed to increase the rent until tenants have lived in a property two years.
We considered taking him to the Rent Committee but decided against it as we thought the up front fees would be better spent on agents fees to find a better landlord in a new flat and think any case we brought would likely be dismissed as we have been issued with an eviction notice.
However, my question is, are you aware if there is any truth to the claims by numerous people that landlords are not allowed to increase rent until tenants have been in a property two years? It would be useful to know this if we end up in a similar position in the future.
Our property sections 1Step Properties confirmed that was the law however the decree from 10 January 2011 changes this, it gives landlords the opportunity to change the price depending on the Rent Index of Emirates of Dubai. Here is the link for the Rent Index to work out if your landlord can increase your rent. So yes your landlord can increase your rent but only if it is very low.
The landlord can request to increase the rental price on any property, but there are capped guidelines to each rental contract.
You MUST have your rental contract registered through the EJARI system which is part of RERA. This will enable any tenant to go to the rental committee, should anything untoward happen within your contract time frame. The cost of registering a tenancy contract is 160AED and it is the responsibility of the Landlord to register the contract, although the tenant may be liable for the 160AED – depends on the landlord.
The following is taken from Emirates 24|7…
Real estate experts told Emirates 24|7 that despite the fact that Real Estate Regulatory Agency’s (Rera) rent index is based on actual rental transactions in Dubai, a number of landlords and agents are still not registering contracts on Ejari, the e-registration portal system, says an industry expert.
“For the index to be effective, landlords and agents need to get contracts registered on Ejari. Enforcement of registration is absolutely necessary since the index is the only one based on actual transactions and is not influenced by any commercial interest,” says Mohanad Alwadiya, Managing Director, Harbor Real Estate.
The decree, which is effective 10th January 2011, caps the increase in property rents in the emirate. Article 2 of the decree endorsed Rera’s rent index as the main reference to determine the average rent in the emirate.
Previously, it was not mandatory for landlords to follow the index for rent hikes.
According to the decree:
If the rent is 26 per cent to 35 per cent less than the average rent for a similar property, the maximum increase shall be equivalent to 5 per cent of rent value.
If the rent is 36 per cent to 45 per cent less than the average rent for a similar property, the maximum increase shall be equivalent to 10 per cent of rent value.
If the rent is 46 per cent to 55 per cent less than the average rent for a similar property, the maximum increase shall be equivalent to 15 per cent of rent value.
If the rent is 56 per cent to 65 per cent less than the average rent for a similar property, the maximum increase shall be equivalent to 20 per cent of rent value.