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Dubai: Rent freeze for three years – what is the new proposed law? 15-06-2021


Explained: What are the rights of the landlord and tenant under the new proposed law.

Whether you rent or lease out a property in Dubai, the upcoming law is going to help protect tenants as well as landlords.

Dubai: If you are a Dubai-based tenant or landlord, a new law which was proposed earlier this year is expected to benefit you, one way or another.

In January 2021, the Dubai Land Department announced that a new rent law was being proposed which would benefit both the landlord and the tenant due to the provisions that were aimed at protecting the rights of both parties.

According to Esraa Rhibani, Litigation associate at The Legal Group, the decree balances the rights of all parties, the tenant and the owner, and guarantees the rights of both the parties.
 

What does the proposed law say?

A few provisions of the new rental law include the following:

a. Rent freeze for three years - The owner may not increase the rental allowance for residential real estate before the lapse of three years from the date of signing the contract between the owner and the tenant.

b. Landlord can resort to Execution Judge for unpaid rent – The law will also enable the landlord to resort to the Execution Judge in the event that the tenant does not pay the rent. Currently, non-payment of rent requires a longer judicial process.

“Fixing the rental value in Dubai for three years will encourage investments in the Emirate, increase the occupancy rate of Dubai real estate, and support the stability of tenants in Dubai,” Rhibani said.
 

Current regulation:

According to Hari Wadhwana, Associate at Dubai-based law firm OGH, this decree has only been announced and the law is yet to be published in the official gazette.
“Currently, the landlord is entitled to increase the rent on annual basis pursuant to Dubai Decree No. 43 of 2013. Dubai Land Department has a rent calculator, which provides for the maximum percentage of rent increase on an annual basis. Individuals are advised to refer to this calculator to get an idea on the annual rent increase,” Wadhwana said.

The rent calculator allows landlords to increase the rent by a certain percentage, depending on how much cheaper a residential unit is compared to its market value. You can access the rent calculator here: dubailand.gov.ae

Article by:


Esraa Rhibani
Litigation associate
 

Source: Gulf News