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Dubai Landlords Now Require Legal Order  For Rent Re-Evaluation From RERA

Breaking news — as of April 1, 2024, Dubai’s landlord can re-evaluate and increase rents. Previously, landlords had to inform the Real Estate Regulatory Authority (RERA) and pay a fee to re-evaluate rents with up-to-date Rental Index benchmarks. Now, landlords need RERA’s legal order or judgment for rent re-evaluation.

This reverses the trend in recent years, where landlords could freely seek rent increases above the Rental Index. The updated RERA Rental Index released in March 2024 allows landlords to increase rents to align with rental growth. However, without a legal order, they can no longer raise rents above the RERA calculator benchmarks.

The change aims to increase tenant transparency and ensure rent hikes are correctly validated against the RERA index. With over 70,000 rental renewals in Q1 2024, having a single authoritative source for rental valuations makes sense. Requiring a legal order adds a layer of oversight to ensure fair application of the updated RERA benchmarks.

Recently, around 72,885 rental contracts were renewed in Q1 2024, a 7.2% year-on-year decrease from Q1 2023 (78,565). This suggests tenants may be moving to purchase property amid rising rents. Each renewal involves both landlord and tenant, so 145,770 rental pricing decisions are made. The updated RERA index allows compliant increases, but no more landlord-driven increases without a legal order.

The updated rules require Dubai landlords to have legal orders to re-evaluate and increase rents above RERA index benchmarks. This reverses previous practice and aims to protect tenants from unfair rent hikes, while still allowing increases in line with rental growth per the RERA calculator. The change comes amid a high volume of contract renewals.

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