Landlord's Right To Increase Rent

Overview

The landlord–tenant relationship in Dubai is primarily governed by Law No. 26 of 2007 Regulating Relations between Landlords and Tenants in the Emirate of Dubai ("Law No. 26/2007"), as amended by Law No. 33 of 2008 ("Law No. 33/2008"). These laws establish the framework for tenancy agreements and regulate the landlord's right to increase rent.

The legislative purpose is to strike a balance between protecting tenants from arbitrary or excessive increases and ensuring landlords receive a fair return on their investment. Rent increases are closely linked to criteria issued by the Real Estate Regulatory Agency (RERA), with disputes adjudicated by the Rental Disputes Settlement Committee (RDSC).

This Practice Note explains:

• the legal framework governing rent increases.
• the conditions, notice requirements, and procedural safeguards.
• the role of RERA and the RDSC in determining permissible increases.
• the exceptional circumstances in which rent increases may be disallowed.

Definitions

• RERA: Real Estate Regulatory Agency, the regulatory authority empowered to set rent increase criteria and maintain the Rental Index.
• RDC: Rental Disputes Settlement Committee, the judicial body with exclusive jurisdiction over rental disputes in Dubai.
• Law No. 26/2007: Law No. 26 of 2007 Regulating Relations between Landlords and Tenants in the Emirate of Dubai.
• Law No. 33/2008: Amending Law No. 33 of 2008, which introduced changes to Law No. 26/2007, notably removing the two-year restriction on rent increases.
• Comparable Market Rent: The rent level determined in accordance with prevailing market rates, based on criteria established by RERA and applied by the RDSC.
• Rental Index: An official rent calculator issued by RERA to determine permissible rental increases depending on property type, location, and prevailing market conditions.
• Notice of Rent Increase: The statutory written notice that a landlord must serve at least 90 days prior to lease expiry if they wish to amend tenancy terms, including rent.

Practical Guidance

1. Legal Basis for Rent Increases

• Rent increases are governed by Law No. 26/2007 (as amended by Law No. 33/2008).
• Article 9 (as amended) establishes that rent must reflect "comparable market rent," determined according to RERA's Rental Index and economic criteria.
• Article 10 empowers RERA to issue implementing regulations, including freezing or regulating rent increases in specific sectors when necessary.

2. Notice Requirements

• Landlords must provide 90 days' prior written notice before lease expiry (Article 14).
• Notice must be served in writing through a legally recognized channel (typically Notary Public service).
• Failure to observe this notice period renders the rent increase procedurally inadmissible before the RDSC.

3. Conditions and Procedures

• The landlord cannot impose rent increases arbitrarily. Increases must comply with:
  • RERA's Rental Index and criteria.
  • prevailing economic conditions.
  • property condition, maintenance levels, and comparable rents in the area.
• Any contractual clause granting an increase above RERA's permissible limits is void as contrary to public order, and tenants may challenge such clauses before the RDSC.

4. Dispute Resolution before the RDSC

• The RDC has exclusive jurisdiction over rent increase disputes.
• The Committee relies on RERA's Rental Index and expert reports to determine the legality of increases.
• If the RDC upholds an increase, and the tenant fails to pay within the specified time, the landlord may seek eviction under Article 25(1)(a), subject to 30 days' notice of payment demand.

5. Exceptional Cases Where Increases Are Not Permitted

• If the landlord fails to carry out substantial maintenance necessary to keep the property fit for use (Article 16).
• If the increase constitutes an abuse of rights or is associated with bad faith.
• Where RERA issues decisions freezing increases to protect market stability.

Related Content

Legislation

• Law No. 26 of 2007 Regulating Relations between Landlords and Tenants in the Emirate of Dubai.
• Law No. 33 of 2008 Amending Law No. 26 of 2007.
• RERA Rental Index Regulations (as periodically updated).

Cases

• RDC law confirming that rent increase clauses exceeding RERA limits are void as contrary to public order (general principle, no case citation required here).

This article is originally published by LexisNexis Middle East.

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.