How to Deal with Illegal Rent Increases in Dubai?
A Good understanding of Dubai’s rental laws is essential for both tenants and landlords. One major concern for tenants is the possibility of unfair rent increases. Unexpected or unlawful rent hikes can disrupt a tenant’s budget and overall well-being. However, by being aware of their rights, tenants can effectively address such issues and maintain a fair rental arrangement.
Let’s discuss Dubai’s laws on illegal rent increases. We’ll cover how to recognize these unlawful hikes and what actions you can take.
How to Deal with Illegal Rent Increases in Dubai?
To effectively tackle the issue of illegal rent increases, it’s important to understand what is considered unlawful. The Real Estate Regulatory Authority (RERA) plays a significant role in this, setting tenancy regulations to oversee rental transactions in Dubai.
In accordance with Article (1) of Decree No. (43) of 2013, landlords are obligated to adhere to specific procedures when adjusting rental rates. This ensures a just and equitable process for all parties involved.
Notice Period
Landlords must give tenants at least 90 days’ notice of any changes to the tenancy agreement before it ends. This gives tenants ample time to either accept the new terms or negotiate the rent. If a rent increase is sudden or unfair, tenants can file a complaint.
Percentage
Landlords can increase rent only when a property’s current rental value is at least 10% less than similar properties in the area. This ensures fair market pricing. To calculate a potential rent increase, you can use a RERA rental increase calculator.
- when the rental value is 11% to 20% lower than comparable apartments, a 5% rent increase.
- when the rental value is 21% to 30% lower than comparable apartments, a 10% rent increase.
- when the rental value is 31% to 40% lower than comparable apartments, a 15% rent increase.
- when the rental value is 40% lower than comparable apartments, a 20% rent increase.
Applicability
This law applies to all landlords, including those in public, private, free zone, and special development zone entities.
How Does It Work?
You’re probably curious about how we arrived at these figures. You can easily find the average rental value of similar properties on the ‘Rent Index of the Emirate of Dubai’.
Let’s explore rental increases with an example. Imagine a studio apartment in Downtown Dubai renting for AED 70,000. This is 20% below the average rent of AED 84,000 for similar units. Landlords can adjust rents based on rental indices. In this case, a 5% increase would be allowed.
How to Identify an Illegal Price Increase?
To avoid unfair rent increases, tenants can use RERA’s rental calculator. This tool calculates a reasonable rent increase, making negotiations between landlords and tenants more transparent.
However, the rental value of two similar properties can vary due to factors such as building age, property condition, amenities, and floor level. Our complete guide to using the RERA rental calculator can help you account for these differences.
However, several variables can impact the rental value of two similar properties. These variables include age, condition, amenities, and floor level. Check out our in-depth guide to using the RERA rental calculator.
How to Deal With Excessive Increases in Rent
Here are some strategies for dealing with illegal rent increases in Dubai:
Communication & Negotiation
If you believe your landlord has illegally increased your rent, it’s important to address the issue directly. Use a rental calculator to quantify the unfair hike and present your findings to your landlord. Open a dialogue to discuss your concerns and work towards a mutually agreeable solution.
File a Dispute
Landlords must provide tenants with a 30-day notice of any proposed rent increase. If a tenant believes the increase is unfair, they can file a dispute with the Rental Dispute Centre (RDC) in Dubai. The RDC can help resolve rental disputes between landlords and tenants who cannot reach a compromise.
Cost of Filing a Dispute
- The Rental Dispute Settlement Centre (RDC) offers services for rental claims, evictions, reconstructions, and lease renewals. A fee of 3.5% of the annual rent value applies, with a minimum of AED 500 and a maximum of AED 20,000.
- Financial claims will incur a fee of 3.5%, subject to a minimum charge of AED 500 and a maximum charge of AED 15,000.
- Miscellaneous Charges:
- Power of Attorney Registration (if required): AED 25
- Service Fee: AED 100
- Knowledge Fee: AED 10
- Innovation Fee: AED 10
- Real Estate Services, Trustees Centres: Service Charges (If Applicable): AED 130+VAT
RDC Key Information
Rental Dispute Centers are situated in various locations throughout the city. The main branch of the RDC is located at:
- Location: Inside the Dubai Land Department, Baniyas Road, Riggat Al Buteen, Deira, Dubai, UAE, Near Etisalat Tower 1
- Timing: 07:30 am to 03:00 pm (Monday to Thursday) and 07:30 am to 12:00 pm (Friday)
- Contact Information: +971 800 4488
How to File a Complaint
Your dispute resolution journey begins with a simple step: filing the necessary documents online or in person. From there, you’ll attend an initial court hearing and, if needed, file an appeal. The process culminates in a mutually agreed-upon solution. Learn more about the entire process in our comprehensive guide to filing a rental dispute at the Rental Dispute Centre.