Landlords need legal order to seek rent re-evaluation

Dubai: Landlords in Dubai can still apply for a rent re-valuation with RERA if they believe they are entitled to a higher asking rent than the one suggested by the updated Rental Index.

However, the process to seek re-evaluation has been changed from this month.

They will have to attach the judgement or legal order as per the new requirements put up by RERA (Real Estate Regulatory Authority). This is for all such rent revaluation requests from April 1.

Anisha Sagar, director of property management at Allsopp & Allsopp Group said, “This effectively reverses the trend in the last couple of years where a landlord has been able to pay a fee to the Land Department for rental valuations."

Rera updated its Rental Index in March 2024, allowing landlords to increase rents to bring in line with the increase in rentals.

The Rera calculator is the single source for calculating rental increases. In the past few years, landlords had the option to apply for a rental evaluation to adjust the current market benchmark set by the outdated calculator.

The updated calculator means landlords can no longer increase rental prices above the benchmark provided on the Rera calculator, allowing for greater transparency and reliable insights to tenants.

Sagar said as of the first quarter of 2024, a total of 72,885 rental contracts have been renewed, which equated to 145,770 tenant and landlord decisions. “With that kind of volume, it makes sense for the Rera calculator to be used as the single source of truth. Adding this layer of legal requirements allows landlords and tenants alike to be sure that valuation changes are vetted fairly against the updated calculator,” she said.

The number of rental contract renewals has shown a 7.2 per cent year-on-year decrease, with Q1 2023 recording 78,565 rental renewals, perhaps an indication of the continued move of tenants looking to purchase homes in Dubai, as the rents have continued to rise over the last 12 months.