RERA Rental Calculator - How much rent you should pay in UAE?
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In 2007, the Government of Dubai passed a law to regulate the relationship between tenants and landlords in the Emirate of Dubai – Law 26 of 2007. This law was made applicable to leased properties which included lands [both agricultural and open]. Hotels and free accommodation provided by natural or judicial persons to their employees were excluded from the purview of this law. This law outlined some basic rules for a landlord-tenant contract including but not limited to:
Registration and Governance of the Tenancy Contract
Rules pertaining to:
1. Period of Tenancy
2. Rent Value
3. Obligations of the Landlord
4. Obligations of the Tenant
6. General governance
On March 14, 2010, the Real Estate Regulatory Agency [RERA] mandated registration of lease contracts through EJARI – an online registration system. This was done to establish a strong legal control over the rental market in Dubai. In 2011, the Dubai Government issued a decree [Decree no 2 of 2011] to regulate the increase of rental price at the time of renewal of the lease contract.
Post enforcement of the decree, RERA, Dubai was mandated to maintain a Rent Index of the Emirate of Dubai and update it regularly with information from:
1.Dubai Land Department [DLD] – the records of property rentals
2.Real Estate Companies. Dubai – data collected by them
3.Market survey – newspaper lease advertisements, billboards, etc.
In 2013, a decree was issued by His Highness Sheikh Mohammed bin Rashid Al Maktoum, for determination of the increase in rent for properties in Dubai. [Decree No. 43 of 2013]
The increase in rent permitted by the decree applicable to private and public landlords is as follows:
Before the implementation of the above-mentioned laws, landlords in Dubai would ask for an increase in rent at the time of renewal of the lease contract as per their requirement or as they deemed fit. With RERA, Dubai regulating the increase in rents on properties in Dubai, it now has a more structured and governed approach. RERA has launched a Rental Increase Calculator to help landlords and tenants take an informed decision about the increase in rentals.
Working of RERA Rent Calculator
The Rental Price Calculator allows you to enter the details of the property and compares it with the Rent Index of the Emirate of Dubai. The results show the maximum permitted the percentage of increase in rent. This is what it looks like:
As can be seen above, you have to enter the following details according to the type of the property that is Residential, Commercial, Industrial.
Type of Property
Expiry Date of your current tenancy contract
Type of Apartment/Category
Area of the property
Select from the list
Select from the list
Select from the list
Number of Bedrooms/Area [in sq. ft.]/Number of Rooms
The annual rent amount currently paid exclusive of water, electricity or any other fees
The results of the Rera calculator look like this:
If the rent of the property leased is due for an increase, then the landlord has to provide a written and notarized notice at least 90 days before the date of renewal of the contract. However, the tenant will not be under any obligation to accept the increased rentals if the landlord does not provide an adequate written notice.
There can be situations where the landlord tries to increase the rent beyond the permissible limits enforced by RERA. The RERA Rent Calculator results can be used to make the landlord understand that the increase is not valid. Usually, landlords and tenants come to an agreement during such discussions.
However, if the landlord still insists on increasing the rentals, then a complaint can be filed by the tenant with the Dubai’s RDSC [Rental Dispute Settlement Centre] located at Dubai Land Department’s head office in Deira. You need to carry a list of documents and pay around 3.5% of the annual rent of the property as a fee apart from other incidental costs. Tenants should resort to filing a complaint only when all other discussions and negotiations fail.
Rera Calculator is an excellent tool designed to bring transparency and order to the rental market in Dubai, benefitting both landlords and tenants. While some people may argue that the calculator does not take the age of the building or the floor on which the apartment is situated or the facilities/amenities provided into consideration, it still gives an approximate idea of the rent in the area. Landlords and tenants can always discuss these parameters and mutually agree on a rent amount higher or lower than that indicated by the calculator. It is designed to be indicative of market prices to help curb whim-based rental increases and a lack of order in the real estate rental market.