Legal limit on rent

Complaints about rent increases from Dubai residents are growing due to the unjustified increase demanded by the landlord. There is no federal law that sets the rent limit, each emirate has its own laws.

For the Emirate of Dubai, Law № 26 of 2007 regulates the relationship between landlord and tenant and provides rules regarding rent. With regard to rent, the Supreme Court of the Union stated that the effect of the provisions of the lease agreement (lease agreement), as set out in Articles 742 et seq. Of the Civil Code, is that the rent is payable by using the leased property. ».

(It should be noted that the Dubai Law № 26 of 2007 applies throughout Dubai, except for the areas covered by the DIFC zone, as real estate in the DIFC zone is governed by the DIFC Law № 4 of 2007).

The law defines the rent as a certain amount of remuneration that the tenant is obliged to pay in accordance with the lease agreement. A lease is a contract under which the landlord undertakes to enable the tenant to benefit from the property for a specific purpose and period for a specified fee, and therefore the amount of rent must be specified in the contract and remains unchanged until the expiration of the contract.

Further, the law provides for the determination of the cost of rent in the event that it is not provided for in the lease agreement or if the rent is determined, but it is impossible to confirm. In such cases, the Committee, ie the Judicial Committee, which is empowered to settle disputes between landlords and tenants, must determine the rent for the leased property in accordance with “similar rent”. “Similar rent” is determined by the commission in accordance with the standards for setting the percentage increase in rent applied by the Real Estate Regulatory Agency (RERA). In addition, the general economic circumstances in the Emirate, the status of real estate, market rents in the same area and current legislation – all these are factors that must be considered when determining a similar rent. RERA should establish criteria for determining rental rates in the Emirate in accordance with the general economic conditions in the Emirate.

Any dispute regarding the lease of premises shall be referred to the committee, as all such disputes fall within the jurisdiction of the committee.

Upon expiration of the lease agreement, it is subject to renewal for a similar period, and during its extension, the landlord may change the terms of the contract. He may reconsider the rent he may maintain at the same level, or may increase or decrease it. The increased or decreased rent will be valid for the term of the lease. For the lease to remain in force, it is necessary for the tenant to agree to the terms thus imposed on the landlord, if the parties do not come to an agreement, the Committee may decide on a fair rent. If one of the parties to the lease wishes to change any of its terms, it must notify the other party at least 90 days before the expiration date, but this condition may be revoked by agreement between the landlord and tenant.

The law also sets a limit on landlords ‘rent increases so that landlords do not take advantage of tenants’ vulnerabilities and exploit them by unreasonably raising rents. Also the rent cannot be increased during the lease agreement. It can be increased only after the expiration of the previous contract, so the rent remains for one year from the beginning of the lease.

Further, Dubai Decree № 62 of 2009 on rental prices in the Emirate of Dubai enshrined the maximum increase in property rent in the Emirate of Dubai depending on the average property rent in the same area and the percentage difference between the average rent and current rent. Thus, depending on the difference, the increase may reach the following limit:

I. zero increase in rent if the rent is up to 25% less than the average rent for facilities of similar characteristics;

ii. 5% of the current rent in the event that the rent is 26-35% less than the average rent of facilities of similar characteristics;

iii. 10% of the current rent in the event that the rent is 36-45% less than the average rent of facilities of similar characteristics;

iv. 15% of the current rent in the event that the rent is 46-55% less than the average rent of facilities of a similar nature; and

v. 20% of the current rent in the event that the rent is more than 55% less than the average rent of facilities of similar specifications.

In addition, the Dubai government has provided us with an online rent increase calculator at the following website:

The aforementioned government website provides a service to calculate the percentage increase in order to obtain the cost of rent in certain areas as a guide. All the user has to do to use this service is to select a calculator on the website and enter the necessary data, after which he / she will be given an increase limit and the average rent for the requested area and premises.

Tips on how to avoid illegal rent increases:

1. Make sure the landlord notifies you in writing of the proposed rent increase at least 90 days before the end of the lease.

2. Make sure the amount of the increase matches the RERA rent calculator for your property.

3. If you can not agree with the landlord on the amount of rent increase, apply to the Lease Committee.