The move marks a reversal of the trend observed in recent years, during which landlords could pay a fee to the Land Department for rental valuations.
Landlords in Dubai still have the option to pursue re-evaluation of rent through the Real Estate Regulatory Authority (RERA) to potentially secure higher rental rates instead of adhering strictly to the recently updated Rental Index.
Nonetheless, the procedure for requesting re-evaluation has been modified starting this month.
As of April 1, 2024, landlords must include a judgment or legal order when applying for the rent evaluation service, as stated by Anisha Sagar, director of property management at Allsopp & Allsopp Group.
“This marks a shift from the previous practice where landlords could simply pay a fee to the Land Department for rental valuations, a trend that has been in place for the past few years.”
In March 2024, Rera released its updated Rental Index, enabling landlords to adjust rents in accordance with the rise in rental rates.
The Rera calculator serves as the exclusive tool for determining rental increases, eliminating the previous option for landlords to request a rental evaluation to adjust outdated benchmarks.
Under the updated system, landlords are restricted from raising rental prices beyond the benchmark provided by the Rera calculator, ensuring greater transparency and reliability for tenants.
According to Sagar, as of the first quarter of 2024, there have been 72,885 renewed rental contracts, involving 145,770 decisions made by tenants and landlords. She emphasized the significance of this high volume, advocating for the Rera calculator as the authoritative standard. This legal requirement ensures that any valuation adjustments are assessed fairly against the updated calculator.
The number of rental contract renewals has experienced a 7.2 per cent year-on-year decline, with Q1 2023 seeing 78,565 renewals. This trend may reflect the ongoing trend of tenants opting to purchase homes in Dubai, given the consistent rise in rents over the past year.
