Dubai: Landlords now require legal order for rent re-evaluation

Photo : khaleej times

Landlords in Dubai can still pursue rent re-evaluation through the Real Estate Regulatory Authority (RERA) to seek higher rental rates, diverging from the recently updated Rental Index. However, starting from April 1, 2024, the process for seeking re-evaluation has undergone a change.

Anisha Sagar, director of property management at Allsopp & Allsopp Group, highlighted that landlords are now mandated to provide a judgment or legal order when applying for the rent evaluation service. This shift marks a departure from the previous practice where landlords could simply pay a fee to the Land Department for rental valuations.

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RERA introduced updates to its Rental Index in March 2024, permitting landlords to adjust rents in alignment with rental increases. The RERA calculator serves as the primary tool for determining rental adjustments. Previously, landlords could request a rental evaluation to deviate from the outdated calculator's market benchmark.

With the updated calculator, landlords cannot raise rental prices beyond the benchmark established by RERA, promoting transparency and reliability for tenants. Sagar emphasized the significance of utilizing the RERA calculator as the definitive reference point, especially given the substantial volume of rental contract renewals.

As of the first quarter of 2024, a total of 72,885 rental contracts have been renewed, encompassing 145,770 decisions involving tenants and landlords. This underscores the importance of ensuring that valuation changes undergo fair scrutiny against the updated calculator.

The year-on-year comparison indicates a 7.2% decrease in the number of rental contract renewals, with Q1 2023 witnessing 78,565 rental renewals. This trend may signify tenants' ongoing inclination towards property ownership in Dubai amid escalating rents over the past year.

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