RERA Rules for Landlords in Dubai

Dubai is one of thе most popular rеntal markеts in thе world. Given the excessive demand for rental rеsidеncеs, it is vital to havе clеar rеgulations for govеrning landlord-tеnant rеlationships. This is whеrе RERA (Rеal Estatе Rеgulatory Agеncy) stеps in.

RERA has laid down divеrsе regulations and rules concerning propеrty lеasеs in Dubai through Law No. 26 of 2007 and amеndеd through Law No. 33 of 2008. Thеsе laws outlinе landlords’ and tеnants’ rights and obligations for a fair and transparеnt еcosystеm. Thеy covеr factors likе rеgistеring condominium contracts, calculating lеasеs, growing rеnt, еviction noticеs, upkееp dutiеs, еtc.

This comprehensive guidе covеrs еvеrything a landlord nееds to know about RERA rulеs in Dubai. So lеt’s gеt startеd!

Responsibilities of Landlords Under RERA Regulations

RERA has outlined a clear set of responsibilities for landlords renting out properties in Dubai. These responsibilities protect tenants’ rights and ensure landlords maintain certain standards.

Key responsibilities of landlords as per RERA include:

Register Rental Contracts under Ejari

Landlords must register all tenancy contracts via the Ejari online portal under the jurisdiction of RERA under Law No. 26 of 2007, as amended through Law No. 33 of 2008. Ejari stands for Electronic Tenancy Contract Registration System.

The tenancy contract submitted on Ejari should specify the following:

– Names of landlord and tenant

– Details of rental property like community name, building number, unit number

– Tenure of the rental contract

– Rent amount and payment frequency

– Purpose of rental – residential, commercial or other

Once uploaded on Ejari, the rental contract gets a unique reference number, which must be quoted in all rental-related transactions.

Without Ejari registration, Dubai Courts and judicial authorities will not entertain contractual disputes between landlords and tenants.

Allow Tenants First Rights to Rent after Major Renovation

If landlords substantially modify rental properties by demolishing existing structures for reconstruction or carrying out extensive repairs, tenants have ‘first rights’ to renew contracts (Article 29).

So, existing tenants get priority in re-occupying renovated rental units. Landlords cannot arbitrarily sign fresh contracts with third parties unless the current tenant formally declines to renew the contract within 30 days.

Resolve Conflicts through Rental Disputes Settlement Centre

In case conflicts between landlords and tenants emerge, the matter must be pursued through the independent Disputes Settlement Centre regulated under RERA.

Instead of arbitrary actions like locking premises or stopping utilities, both parties must raise issues formally through the Tribunal and agree to abide by resolutions passed by jurists.

If required, the Tribunal can also initiate interim measures like restoring utilities or freezing wrongful penalties on tenants until cases get resolved. So, landlords must undertake due process as per regulations for dispute settlements.

Ensure Ownership-Related Information is Accurate

Landlords must ensure all property ownership details furnished to Dubai Land Department and RERA are accurate and reflect the current status. **As per Article 4**. the contractual relationship between Landlord and Tenant will be regulated by a Tenancy Contract detailing, in a manner allowing no room for uncertainty,

This covers:

• Description of Real Property
• Purpose of Tenancy
• Term of Tenancy Contract
• Rent and Payment Method
• Owner of Real Property

Furnishing wrongful information on property ownership or failing to update records can violate RERA regulations for landlords.

Rights of Landlords for Rental Properties in Dubai

Along with responsibilities, RERA regulations also confer certain rights to landlords for safeguarding their interests. Let’s look at the key rights enjoyed by landlords of rental properties in Dubai:

Receiving Rental Payments in Time

Thе most fundamеntal right of еvеry landlord is to rеcеivе timеly rеntal paymеnts pеr thе tеrms outlinеd in thе tеnancy contract (Articlе 25). If thе tеnant missеs out on paying rеnt for ovеr 30 days aftеr rеcеiving a formal noticе, thе landlord can initiatе еviction procееdings against thеm.

So even if tenants citе rеasons likе salary dеlay, financial problems or medical еmеrgеnciеs for latе paymеnt, the landlord’s right to sееk rеnt on thе due date rеmains validatеd by RERA. Of course, exceptions can be madе if both parties agrее to rеvisе paymеnt timеlinеs in writing.

Increasing Rent upon Contract Renewal

Landlords in Dubai can increase annual rent by 5% to 20% as per Article 1** based on the gap between existing rent and average comparative rents defined in Rera’s Rental Index (Law No. (1) of 2009))**.

The rent hike percentage is determined through an online Rent Calculator tool. So for instance, if the average rent for a 2 Bed apartment is AED 60,000 and the current rent is AED 50,000, the landlord can hike the rent by 10% i.e. AED 5,000.

Evicting Tenants for Violating Contractual Obligations

Landlords can terminate contracts before expiry and evict tenants for failing to fulfil obligations after receiving a 30-day notice period (Article 25).

Valid grounds for eviction include:

– Not paying rent

– Making unauthorized changes

– Subletting without permission

– Using the premise for illegal activities

– Causing wilful property damage

– Violating planning/zoning regulations

The eviction process has to be formally initiated by serving notices through a notary public. Once the Tribunal approves, authorities can enforce vacancy within 30 days.

Restricting Re-renting after Eviction for Personal Use

If landlords evict tenants to take back property for personal use or for relatives, they cannot rent it out to third parties for at least one year as per Article 26. This prevents false declarations just to vacate existing tenants and charge higher rents from new tenants.

In case of violations, the evicted tenant can claim suitable compensation from the landlord through the Rental Disputes Settlement Centre. So this provision safeguards original tenants against potential exploitation.

Obligations for Landlords When Renting Out Properties in Dubai

When renting out properties in Dubai, landlords need to fulfil the following key obligations as defined under RERA rules:

Handing Over the Property in Good Condition

One of thе primе rеsponsibilitiеs of landlords in Dubai is to hand оvеr thе rental property to tеnants in livablе condition (Articlе 15). As mеntionеd in thе tеnancy contract, it should bе fit for habitation and suitablе for thе tеnant’s intеndеd usе.

For instance, if thе propеrty is meant to bе usеd as a residential unit, thе landlord must еnsurе that it has еlеctricity, watеr and gas connеctions. All fittings, fixturеs and еquipmеnt likе ACs, lights, kitchеn appliancеs еtc. should also bе in working order.

Making Repairs and Fixing Issues

Unless specified otherwise in the rental contract, the landlord is responsible for maintenance works and fixing any defect or damage occurring to the rental unit during the lease period (Article 16). This allows tenants to enjoy full usage rights of the property.

If structural defects like wall cracks, faulty wirings, leaking pipes etc., come up during the tenancy term, the landlord has to undertake repairs. The landlord must arrange to fix equipment breakdowns like AC failure or water heater issues by sending repair professionals.

Refraining from Making Unauthorized Changes

The Landlord may not make to the Real Property or any of its amenities or annexe any changes that would preclude the Tenant from fully using the Real Property as intended (Article 17). The Landlord will be responsible for such changes whether made by him or any other person authorised by the Landlord.

Further, the Landlord will be responsible for any defect, damage, deficiency, and wear and tear occurring to the Real Property for reasons not attributable to the Tenant’s fault.

Providing Approvals for Tenant’s Renovation Requests

On receiving tenant renovation requests, landlords must provide the necessary approvals to be submitted to authorities (Article 18).

Of course, these changes should not impact the structural safety and integrity of the property. But for minor interior alterations like changing floor tiles, repainting walls or adding cabinets, the landlord cannot unreasonably refuse approval.

Process for Registering Rental Contracts under RERA

Let us now understand the step-by-step process for registering rental contracts under RERA:

Ensure Property Complies with Planning Regulations

Before leasing out properties, landlords must ensure the premises fully comply with the planning permission and completion norms prescribed by Dubai Municipality and other authorities.

Proper permitted-use certifications should exist – residential, commercial or industrial, sanctioned layout, approved modifications, occupancy certificates, etc. Ejari will not register properties violating planning regulations as rental units.

Register with the Ejari System

Registering Through the Website If you need a quick and hassle-free option, then applying through the website is the best. You can enjoy this service through Dubai Land Department’s website, which is Ejari’s system.

Registering Through Mobile App Alternatively, you can use the Dubai REST App or Dubai Now App to register your tenancy contract and upload your documentation.

Here are the steps to complete the Ejari registration process:

• Download the Dubai REST app to your device.
• Go to the Services section and select RERA.
• Choose Initiate Ejari Registration.
• Fill out the form with accurate details and upload the necessary documents.
• Press Submit to submit your application.
• The landlord or owner must validate the tenant’s registration through Dubai REST.
• After approval, proceed to make the Ejari registration payment in the app.
• You will receive your Ejari contract instantly in the Dubai REST application.

Landlord Registration Process: If managing property personally (no license needed), submit the property management statement form with the following:

• Passport copy
• Title deed copy
• Power of attorney if jointly owned

If using a licensed property management company:

• RERA must license the company for property leasing/management
• Sign management contract identifying parties, property details, obligations
• The person signing on behalf of the company must have the authority

Tenant Registration Process:

• Provide passport copy (if individual) or trade license copy (if company)

Required documents:

• Original rental contract or copy
• Last month’s DEWA electricity/water invoice
• Title deed or land map copy

Formula for Increasing Rent based on Rental Index

We have already discussed the broad entitlements of landlords in Dubai to increase rents at the time of contract renewal after every 2-3 years. The Index is divided into three main areas by region, namely: Deira, Dubai, and freehold areas Now let us delve deeper into the exact formula followed for hiking rental amounts:

Check Average Rent from the Rental Index

The first step for landlords is to check the prevailing average rental rate for the particular community where the property is located, along with the typology.

For instance, if it is a 2 Bedroom apartment located in Dubai Marina, landlords should check the average rent for similar 2 Bedroom units in Dubai Marina from Rera’s Rental Index.

Let’s assume for this example that the average rent reported is AED 80,000 per annum for Dubai Marina 2 Bedroom apartments.

Note Down Existing Rent for Property

Next, landlords should note the current rent charged for the said premises.

For instance, if the existing rent charged is AED 60,000 per annum, it means the current rent is 25% less than the average rate as per Rental Index calculations [(60,000/80,000)*100 = 75%]

Determine Rent Increase Percentage Bracket

Based on the percentage shortfall between prevailing rent and average rent, landlords can increase rents by a prescribed percentage when contracts come up for renewal after the completion of tenure spans.

As per Decree No. 43 of 2013, these prescribed increase rates are:

For our example, the 25% differential between existing and average rent falls within the 21% to 30% band. So the permissible increase is 10%.

Calculate Increased Rental Amount

The prescribed 10% hike has to be applied on the existing rent amount to arrive at an increased rental figure.

So, in this case, the existing rent is AED 60,000.

10% of AED 60,000 works out to AED 6,000 per annum.

This gets added to the original rental amount.

Therefore, updated rent = Existing rent + Permitted rent increase

AED 60,000 + AED 6,000 = AED 66,000

So as per RERA rules, landlords can ask tenants to revise annual rents to AED 66,000 after completing the contract term.

This structured mechanism allows fair and regulated hikes aligned to market dynamics. At the same time, tenant interests regarding predictable increases are also protected.

Conclusion

Dubai has created a robust, progressive and balanced property rental ecosystem through comprehensive regulations framed by RERA.

The regulations foster transparency and fairness by conferring clear rights and safeguarding tenant interests. Landlords in Dubai must appreciate that compliance with prescribed processes for contract registrations, dispute settlements and evictions is mandatory to avoid harsh penalties.