By dubailife 
If you own a villa in Dubai that you’ve rented out, you may have noticed some disparities in rental income compared to similar properties in the area. If your rental income is falling behind by, say, around Dh20,000, you may be wondering: can you simply raise the rent all at once to meet the current market rate? The answer, as with many aspects of real estate in Dubai, involves following specific guidelines set out by local authorities.
Understanding Dubai’s Rent Increase Regulations
In Dubai, rent increases are carefully regulated, particularly when renewing a lease. The key legislation here is Decree No. 43 of 2013, which specifies allowable rent increases based on how far the current rent is below the average market rate for similar properties.
Guidelines for Rent Increases
Here’s a breakdown of the rent adjustment limits based on the average rental values for similar properties in your area:
- No increase allowed if the current rent is up to 10% below the area’s average rental rate.
- 5% increase allowed if the rent is 11% to 20% below the area average.
- 10% increase allowed if it’s 21% to 30% lower than the average.
- 15% increase allowed if the rent is 31% to 40% below average.
- 20% increase allowed if it’s more than 40% below the market average.
The average rental values are defined by the Dubai Rent Index, maintained by the Real Estate Regulatory Agency (RERA). This index acts as a benchmark, ensuring that rent adjustments are fair and consistent with the market trends.
RERA’s Role in Regulating Rent Adjustments
The Real Estate Regulatory Agency plays a significant role in overseeing rent regulations. According to Law No. 26 of 2007, RERA has the authority to set criteria for rental adjustments that align with the Emirate’s economic climate. This regulatory framework ensures both landlords and tenants benefit from fair and balanced rental agreements.
Negotiating Rent Adjustments During Lease Renewal
When your villa’s lease is up for renewal, you and your tenant have the opportunity to negotiate a new rental rate, ideally arriving at a mutual agreement. If no agreement is reached, you may submit the case to the Rental Dispute Centre, where a fair rental value will be determined based on RERA guidelines.
The 90-Day Notice Requirement for Rent Changes
To make any adjustments to the rent terms, you are required to provide your tenant with at least 90 days’ notice before the lease renewal date. This notice period allows tenants to consider the new terms or discuss alternatives. This requirement is specified under Law No. 33 of 2008 (amending Law No. 26 of 2007), which mandates prior notification for any amendments, providing ample time for negotiation or for the tenant to prepare accordingly.
Steps to Take if You Wish to Raise the Rent
- Check the RERA Index: Determine where your villa’s current rent stands compared to the area’s average rate.
- Provide Notice: If you plan to increase the rent, inform your tenant at least 90 days before the lease expiry.
- Negotiate: Engage in an open conversation with your tenant to reach a fair rental adjustment.
- Seek Resolution if Necessary: If you and the tenant can’t agree, the Rental Dispute Centre can step in to establish a fair rental rate.
Final Thoughts
Raising the rent for your Dubai villa to align with current market rates is possible, but it must be done within the regulatory framework. By following RERA’s guidelines and observing the 90-day notice requirement, you can ensure a smooth, fair process for both you and your tenant. Dubai’s rent regulations protect the interests of landlords and tenants alike, providing a structured approach to maintaining fair rental values across the city.
Source : Khaleejtimes