Dubai sets rent guidelines

ACCORDING to the local daily Gulf News, Dubai landlords will have to follow a well-defined set of parameters on rental increases in their lease renewals according to a new decree. It applies to both residential and commercial properties and also to those within free zones in the emirate. The decree issued by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai sets rental ceilings based on certain terms and conditions. There can be no increase if the existing rent is only 10 per cent lower than the average that a similar property commands within a neighbourhood. The maximum increase, as specified by the decree, is set at 20 per cent if the current rental is more than 40 per cent below the average for a property of similar dimensions. Moreover, the decree gives traction to the Dubai Rental Index from the Real Estate Regulatory Agency (RERA ).The decree takes effect from the date of issue in the official gazette. In a statement, the Dubai Government emphasised the need to abide by RERA regulations on rent increases in the emirate. The daily also reported that industry sources feel the decree represents a continuation of steps that the government has taken to prevent the property market from overheating. The emirate recently created a legal platform under the Dubai Land Department to specifically address rental disputes.