Before, landlords in Dubai had the option to request a rental evaluation to modify rental rates according to the benchmark provided by the outdated calculator.
Starting April 1, in compliance with new regulations from the Real Estate Regulatory Authority (RERA), Dubai landlords seeking a rent re-evaluation based on a higher rate than indicated by the updated Rental Index must provide a judgment or legal order when submitting their requests. This process requires landlords to initiate proceedings through the Rental Dispute Centre (RDC) and apply for a case to acquire the required legal order, as outlined on the Ejari portal.
Before, landlords had the option to request a rental assessment in order to modify rental rates according to the benchmark provided by the outdated calculator.
What is the RERA calculator reset?
As of March 1, RERA introduced an updated calculator, now the exclusive tool for determining rental increases. Previously, landlords could request a rental evaluation to adjust prices according to the benchmark provided by the outdated calculator.
The updated system now imposes limits on property owners to prevent them from surpassing the benchmark, thus providing tenants with increased transparency and reliability. Landlords still have the option for reassessments, albeit with modified procedures.
Anisha Sagar, Director of Property Management at Allsopp & Allsopp Group, emphasized the importance of the RERA calculator as the primary reference point, especially given the significant number of rental contract renewals – 72,885 contracts, translating to 145,770 decisions between tenants and landlords in Q1 this year. This reinforces the confidence of both landlords and tenants in the fairness of valuation adjustments against the updated calculator.
The decrease in rental contract renewals, a 7.2 percent decline year-on-year, indicates a trend towards tenant home-ownership driven by escalating rents.
What does this mean for Dubai tenants?
Svetlana Vasilieva, Head of Secondary Sales at Metropolitan Homes, anticipates that the reset of the RERA rent calculator will prompt tenants to delve deeper into homeownership opportunities.
“Tenants are not only considering ready properties but also those approaching completion (within six-12 months) owing to enticing post-handover payment schemes provided by numerous developers. This inclination enables tenants to commit to securing a permanent residence for themselves and their families, alleviating concerns about facing increased rental expenses upon contract renewal,” she concluded.
