Regulation of rental prices in the UAE

Regulation of rental prices in the UAE - Makebiz

Investing in real estate for the purpose of further renting out is a popular and profitable business. However, it is important to know that in this sphere there is a special legislative regulation of prices by RERA agency. 

In case of renting out the housing and unforeseen price increase on the part of the landlord, the tenant has the right to apply to the Agency regulating the real estate market. The admissibility of the price increase can be checked and depends on the initial price stipulated in the agreement and the average values on the market. 

According to the current legislation, the lease agreement must be registered in the Ejari system. Only then can disputes related to the rent be considered. The contract specifies the amount to which both parties agree. If it is renewed, the landlord has the right to increase the price, but there are maximum rates for increasing it. If the rent is 10% below the average market value, it is prohibited to increase it. From 11% to 20%, a 5% increase is allowed. From 21-30% — by 10%. And accordingly, if the rate is below the market average at 31-40%, the increase is possible by 15%, starting from 40% — by 20%. 

On the website of the Land Department of Dubai or in its application, you can calculate the allowable percentage of increase in housing prices depending on a particular area. 

It is important to remember that if the landlord wishes to raise the fees, it is obliged to inform the tenant at least 90 days before the expiration of the current contract via the email specified when registering with Ejari. If the new terms are in line with the calculator calculations from the Land Department, the tenant must accept them. 

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