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

Posted By on December 23, 2013

The Decree issued by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai states that if the rent of the renewed property unit is less than 10% of the average similar rent value in the locality, Landlords will not be allowed to raise rents. The Decree, No. 43 of 2013, sets a specific band on how the optimum rental increases that a landlord can demand while renewing leases.

Future rent increases in Dubai will be decided by a weighted average of what properties in that particular area command instead of an arbitrary demand by a landlord. This will be applied in both residential and commercial property in the emirate.

This will be be applicable to private and public sector owned properties in Dubai, as well as — pertinently enough — within the free zones.

Landlords can raise rents on renewals by:

  • 5 % if the earlier rental is 11 to 20 per cent lower than the average rent for a similar property;
  • 10 % if the rental is 21 to 30 per cent lower than the current going rates for properties of a similar scale;
  • 15 % if the rent is as low as 31 to 40 per cent than comparable ones; and
  • 20 % if a property’s rental is more than 40 per cent less than the average.

The Decree takes effect from the date of issue and will be published in the gazette.

In a statement, the Dubai Government emphasized the need to abide by the new regulations.

Source: Gulf News


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