Dubai's real estate market is dynamic, with rental prices often fluctuating based on various factors. To navigate these changes effectively, both landlords and tenants rely on tools like the RERA Rental Increase Calculator provided by the Real Estate Regulatory Authority (RERA). This calculator plays a crucial role in determining whether a proposed rental increase aligns with regulatory guidelines. Let's delve deeper into how this tool works and its significance for Dubai residents.
What is the RERA Rental Increase Calculator?
The RERA Rental Increase Calculator is a valuable resource designed to promote fairness and transparency in the Dubai real estate market. It stems from Decree No. 43 of 2013, initiated by H.H Sheikh Mohammed bin Rashid Al Maktoum, aiming to regulate rental increases and curb illegal practices.
This tool utilizes the RERA rental index, currently updated quarterly, to provide landlords and tenants with insights into permissible rental adjustments. By inputting specific property details, such as type, location, and current rent, users can determine whether a proposed increase complies with regulatory standards.
Recently introduced DLD Rental Valuation Service
Should the RERA rental index not be updated or the average values shown be significantly below the market value, there is a rental valuation service available via the Dubai Land Department which will carry out an individual valuation of the property. The permissible increase is still calculated as per Decree 43 of 2013 and is an additional benchmark for an increase in the rent.
Exclusive Links has a Property Management division that has been looking after owners' properties since 2005. Our Property Managers, Paul Birley and Sarah Watmore are always working with owners to maximise their investment returns but also working and finding the balance with securing the right tenants at the right price.
“If a property owner is looking to get a higher increase they can again use this new rental valuation service available via the DLD at a fee of AED 2,025” explains Paul Birley, Certified Property Manager with Exclusive Links for 15+ years. He continues “This service values your property individually and the market rate will be reflected. On receiving the rental valuation certificate, an increase can be recalculated, however, up to a maximum of 20% can only be requested of your tenant”
Sarah Watmore - also a Certified Property Manager with Exclusive Links with over 15 years of experience further explains “ The step-by-step is quite simple via the Ejari system or the Rest App.” She goes on to explain the process as follows:
Step I: Select your property to evaluate the rental
Step II: Add the details of the selected property
Step III: Upload the documents
Step IV: Pay the fees after the application is approved
Step V: Receive a real estate rental evaluation certificate
How Does it Work?
The calculator operates by comparing the current rental price with the average prices of similar properties in the designated area. It considers factors like property type, area, number of bedrooms, and tenancy contract expiry date to generate accurate assessments.
You will be asked to provide:
- Type of property: Residential, commercial, industrial, or staff accommodation
- Expiry date of the tenancy contract
- Location of the property: Deira, Bur Dubai, elsewhere in Dubai, or freehold property
- Property type: Apartment or villa
- Area: Community or subcommunity
- Number of bedrooms
- Current annual rental amount
However, it's essential to note that the calculator does not account for certain variables, such as the age and condition of the building, available facilities, or floor level. While it offers valuable guidance, additional considerations may influence rental decisions.
Understanding Permissible Rent Increases
The RERA rental index provides a structured approach to rental increases, ensuring fairness for both landlords and tenants. According to the guidelines, the maximum permissible rent increase varies based on the deviation of the current rent from the market value:
If the current rent is below 10% of the calculated market value, no increase is applicable.
For rents between 11% and 20% below market value, a maximum increase of 5% is allowed.
Rents 21% to 30% below market value can see a maximum increase of 10%.
Properties with rents 31% to 40% below market value may have a maximum increase of 15%.
If the rent is more than 40% below the calculated market value, a maximum increase of 20% applies.
Legal Considerations and Tenant Rights
Rent increases are allowable once per year and are generally executed during lease renewal periods. This protocol guarantees that rent adjustments adhere to legal standards and maintain fairness for both landlords and tenants.
Landlords must adhere to specific legal protocols when implementing rent increases. They are required to provide written, notice to tenants at least 90 days before the contract renewal date. Failure to comply with these regulations may invalidate the proposed increase.
In cases where tenants dispute a rent increase, they can utilize the Rental Dispute Settlement Centre to resolve the issue. This recourse ensures that tenants are protected from unjustified hikes and promotes equitable rental practices in Dubai.
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Empowering Landlords and Tenants The RERA Rental Increase Calculator serves as a cornerstone in Dubai's real estate landscape, fostering transparency and accountability. By leveraging this tool, landlords can make informed decisions aligned with regulatory standards, while tenants can advocate for their rights confidently. As Dubai continues to evolve as a global hub, tools like the RERA calculator play a pivotal role in maintaining a fair and sustainable rental market. Whether you're a landlord considering a rental adjustment or a tenant navigating lease negotiations, understanding the RERA rental index is key to ensuring a harmonious rental experience in the emirate. |
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Exclusive Links have been leaders in leasing and property management services since 2005
Thinking of moving? Exclusive Links have many listings you may wish to consider – both properties that are managed by our company and also casual landlord listings. We do have 2 prime office locations in Dubai Marina and Dubailand to ensure we have all of Dubai covered. Click here for our apartments for rent and villas for rent.
We work very closely with our landlords and managed owners to ensure the correct rental asking price is inline with the rental index and all our listings are updated regularly to maximise the potential of each listing, looking afer the interests of property owners but also showcasing a wide range of properties across all budgets for tenants consideration.
Check out the RERA rental increase calculator and see if your rent may increase or call the experts – call Exclusive Links and let us advise you on your negotiations.
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