Using Dubai’s Smart Rental Index to Negotiate a Fair Rent
In Dubai, rent increases are determined based on the average rent hike of similar properties in a designated area. According to Article 1 of Decree No. (43) of 2013, rent increases upon contract renewal must follow these guidelines:
- No increase if the current rent is up to 10% below the area’s average rental value.
- A 5% increase if rent is 11% to 20% below the average.
- A 10% increase if rent is 21% to 30% below the average.
- A 15% increase if rent is 31% to 40% below the average.
- A 20% increase if rent is more than 40% below the average.
The ‘Rent Index of the Emirate of Dubai,’ approved by RERA, determines the average rental value, as outlined in Article 3 of the Dubai Rent Increase Law.
RERA is responsible for regulating rent increases and decreases based on Dubai’s economic conditions, as stated in Article 10 of Law No. 26 of 2007.
When renewing a rental contract, both landlords and tenants have the right to negotiate terms, including rent adjustments. If no agreement is reached, the Rental Dispute Centre can determine a fair rental rate based on specific criteria.
Additionally, any changes to rent terms require a minimum 90-day written notice before contract expiration unless both parties agree otherwise. This is stated in Articles 13 and 14 of Law No. 33 of 2008, which amends Law No. 26 of 2007.
- Article 13: Landlords and tenants may amend contract terms before expiration. If they fail to agree, the tribunal determines a fair rent.
- Article 14: If either party wishes to modify the contract terms, they must notify the other at least 90 days before contract expiry unless otherwise agreed.
If a landlord provides a 90-day notice and the previous rent index supports an increase, the applicable index depends on the renewal date:
- If renewed before 2025, the previous index applies.
- If renewed in 2025, the new index is used.
Your landlord can only raise the rent if the RERA index allows an increase. If you believe the hike is unfair, you can file a dispute with the Rental Dispute Centre for resolution.
