Mohammad issues decree on property rent caps in Dubai while renewing tenancy contracts

Dubai: Future rent increases in Dubai will be decided by a weighted average of what properties in that particular area command rather than an arbitrary demand by a landlord. It applies equally to residential and commercial realty in the emirate. 

This will be the natural result of a new decree issued by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. The Decree, No. 43 of 2013, sets a specific band on how the optimum rental increases that a landlord can demand while renewing leases.

The new rental slab will not allow landlords to raise rents on renewals if the current lease is only 10 per cent lower than the average rent of a similar property.

It will be applicable to private and public sector owned properties in Dubai, as well as — pertinently enough — within the free zones. The Decree thus brings the future setting of lease terms and renewals more in sync with the Dubai Rent Index brought out by the Real Estate Regulatory Agency