Many tenants across UAE receive a notice from their landlord prior to the end of their rental contract informing them of an increment in the rent, and in certain circumstances, if the tenant fails to comply with the increment requested, they are served an eviction notice from the landlord.
Based on federal regulations applicable in the UAE, tenants and landlords must be aware of the rules and conditions which dictate the permissible percentage of the increment in yearly rent, which differs from Emirate to Emirate.
Exemptions from the Rental Law Protection:
Generally, the rental regulations apply to all properties in the UAE with a few exceptions such as non-attested rental contracts by governmental authorities, workers accommodations, governmental properties, and agriculture properties.
Legally Increment:
The Legally permitted increment in the rent differs from one Emirate to another:
1- Abu Dhabi, Ras Al Khaimah and Fujairah: landlords can increase the rent once a year by a maximum of 5%.
2- Dubai: the percentage of the legal increment is subjected to the average standard rent, the average standard rent shall be determined in accordance with the “Dubai Rental Index” adopted by RERA, and the parties can use the rental index calculator to determine the standard rate.
3- Sharjah: landlords cannot increase the rent before the laps of three years from the date of signing the contract, and that increase is subjected to the average standard rate, and it may not be increased again until two years have passed from the date of the first increase.
4- Ajman: landlords cannot increase the rent before the lapse of three years from the date of signing the contract and it may not be increased again until three years have passed from the date of the first increase or from the date of signing the contract whichever comes later. The increment should not exceed 20% of the rent and is subject to providing two months' notice prior to the expiration date of the lease contract.
5- Umm Al Quwain: landlords can increase the rent once a year with a maximum increase of 10% from the rent, subjected to sending a legal notice three months prior to the end date of the leasing contract.
Disputes:
Each Emirates has its own Rental Dispute Centre, and such committee is responsible for settling all types of disputes between landlords and tenants, especially when it comes to increase in the leasing contract and each committee has its own rules and procedures to be followed.
HOW CAN WE HELP?
Hamdan Al Shamsi Lawyers and Legal Consultants are perfectly positioned to assist our clients in respect of all claims in the Dubai Courts. Our firm has three divisions including (1) the DIFC team; (2) the UAE Litigation team; and (3) the Corporate team, and currently deal with a network of other law firms around the world including the USA, UK, France, Italy, Germany, Saudi Arabi, Oman, Kuwait, Bahrain, Jordan, Lebanon, China and Australia.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
