- What is the RERA Rental Increase Calculator?
- How much can my rent increase by?
- When is a rent increase allowed?
- Illegal rent increases – what do I do?
- FAQs
RERA represents the Real Estate Regulatory Authority, as a unit of the Dubai Land Department, a key institution tasked with overseeing and regulating the real estate sector’s operations and standards.
Besides RERA provides a rental increase calculator which helps landlords and tenants to determine whether a proposed rental increase is allowed or not.
The new RERA Index has just come out and many residents of Dubai are wondering if they should expect rental increases or decreases from their landlords this year.
For those who don’t know how the RERA rental increase calculator works, here’s a simple explanation.
What is RERA Registration Dubai’s Role?
RERA primary mission is to establish a regulatory environment that ensures fairness and transparency for everyone involved in real estate transactions, while also strictly enforcing the regulations set forth for the industry.
What is the RERA Rental Increase Calculator?
In December 2013 in a move to prevent the market from out pricing itself, H.H Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai, issued Decree No. 43 of 2013 to cap rental increases and to kerb illegal rental increases.
The rental calculator works in accordance with the RERA rental index which is updated yearly and the rental recommendations in the index are valid for all rental properties in Dubai, for the entire year.
The RERA rental increase calculator allows landlords and tenants to input details of their property and be provided with results to show if a property rental increase is applicable or not.
Landlords are encouraged to check the rental calculator when considering a rental increase to ensure they are working within the confines of the law and tenants are advised to check the calculator in the event of a notice to increase their rent.
The RERA rental calculator asks for the following:
- Whether the property is residential, commercial, industrial or staff accommodation
- Tenancy contract expiry date
- Main area of the property (Deira, Bur Dubai which refers to elsewhere in Dubai or whether it is a freehold property)
- Property type (apartment or villa)
- Area (community or subcommunity)
- Number of bedrooms
- Current annual rental amount
However, there are some important aspects which the RERA rent calculator does not take into consideration:
- Age of the building/unit
- Building condition
- Available facilities
- Floor level
The calculator works by comparing the price of your property with the average prices of similar properties in your area.
How Much Can My Rent Index Increase by?
RERA rental index is updated annually. For example, as of January 2016, the RERA rental index followed a graded structural approach, as follows:
- If the current annual rent is below 10% of the calculated market value, there is no increase applicable.
- If the current annual rent is between 11% and 20% under the calculated RERA market value, the maximum rental increase applicable is 5%.
- If the current annual rent is 21% to 30% under the calculated RERA market value, the maximum rent increase applicable 10%.
- If the annual rent on the property is 31% to 40% under the calculated RERA market value, the maximum rent increase applicable is 15%.
- If the annual rent on the property is more than 40% below the RERA calculated market value, the maximum rent increase applicable is 20%.
When is a Rent Increase Allowed?
If your property is eligible for a rental increase, and only then, your landlord must give you written notice that is notarised, 90 days prior to your contract renewal. It can be handed personally to you, left at your door or sent via registered mail.
If the landlord fails to give you a written notarised notice before the assigned 90 days in any of the means specified above, you are not obligated to accept the rental increase.
Illegal Rent Increases – What do I do?
Unfortunately, despite the law and the presence of the rental increase calculator, some landlords will try to increase rent when they are not allowed to – or they will increase rent beyond what is allowed by law.
In the case that the rental calculator indicates a rental increase is excessive or simply not allowed, but the landlord is insistent on increasing rent, the tenant should try to discuss with the landlord and use the rental calculator as supporting evidence.
RERA Rental Increase Calculator 2024 Update
In a move to make the rental market more transparent and fair, the Real Estate Regulatory Agency (Rera) updated its rent increase calculator on March 1, 2024.
This revamped tool now better reflects real-world market prices, making it easier for landlords and tenants to navigate rental negotiations with a clearer picture of the current market trends.
FAQs
In this FAQs section, we’ve compiled all the key information and commonly asked questions about RERA, simplifying your search for answers in one convenient spot. No hassle, just straightforward information at your fingertips.
The RERA Index in Dubai which is part of the Real Estate Regulatory Authority (RERA) under the Dubai Land Department, offers a valuable tool; the rera rental calculator. This tool aids both landlords and tenants in evaluating if a proposed rental increase is within the permissible guidelines.
To utilize the RERA rent calculator, input the necessary information such as property type, contract expiry date, certificate number, certificate year, and your current annual rent. After entering these details, click the “Calculate” button to receive the calculated outcome.
In Dubai, the permissible rent increase, as regulated by the Real Estate Regulatory Agency (RERA), typically does not exceed 5% annually. However, this cap may vary depending on factors like the type and location of the property, as well as the duration since the last rent increase.
Under RERA guidelines, landlords in Dubai can raise the rent by up to 20% if the existing rent is 40% below the average market rate. The average market rate can be determined using the RERA rental index, ensuring fairness in rental practices.
According to RERA’s guidelines we mentioned before, the allowable increase in annual rent is tied to the current rent’s deviation from the market value. Specifically, a rent that is 11%-20% below the market rate can be increased by up to 5%, on the other hand the one that is 21%-30% below can see a 10% hike, and if the rent is 31%-40% under market value can be raised by up to 15%.
In Dubai, once the rent amount is set in a lease agreement, landlords do not have the freedom to adjust it at will. However, rent increases are permissible only once annually and are typically implemented at the time of lease renewal. This approach ensures that rent adjustments are both fair and legally compliant.
Should the discussions not prove fruitful, then the tenant is well within their right to lodge a rental increase dispute with the Rental Dispute Settlement Centre where the matter will be dealt with accordingly.
Click to open the RERA rental increase calculator in a new window and see if your rent may increase.
Thinking of moving? We have thousands of villas for rent and apartments for rent in Dubai.