Landlords in Dubai require a legal order to rent re-evaluation

Dubai's real estate market constantly evolves, and landlords always seek ways to maximize their rental income. However, with the recent changes implemented by the Real Estate Regulatory Authority (RERA), landlords will need to adjust their strategies when it comes to seeking rent re-evaluation.

In the past, landlords had the option to pay a fee to the Land Department for rental valuations, allowing them to adjust their rental prices above the benchmark provided on the Rera calculator. This gave landlords more flexibility in setting their rental prices but also raised concerns about transparency and fairness for tenants.

With the updated Rental Index released by Rera in March 2024, landlords can no longer increase rents above the benchmark provided on the Rera calculator. This move aims to create greater transparency and reliability for tenants, ensuring rental prices align with market rates.

As of April 1, 2024, landlords seeking rent re-evaluation must now attach a judgment or legal order to their application. This is a significant change from the previous process, which allowed landlords to pay a fee for rental valuations simply. By adding this layer of legal requirements, Rera aims to ensure that valuation changes are vetted somewhat against the updated calculator.

According to Anisha Sagar, director of property management at Allsopp & Allsopp Group, the updated Rental Index and the new process for seeking re-evaluation of rent will provide greater clarity and certainty for both landlords and tenants. With over 72,000 rental contracts renewed in the first quarter of 2024, it is important for both parties to have a reliable source of information for rental pricing.

The decrease in rental contract renewals compared to the previous year could indicate tenants looking to purchase homes in Dubai as rents continue to rise. This trend underscores the importance of having a fair and transparent rental pricing system as landlords and tenants navigate Dubai's dynamic real estate market.

The changes implemented by RERA signal a shift towards greater transparency and fairness in the Dubai real estate market. Landlords must adapt to the new process for seeking rent re-evaluation, ensure that they comply with the updated Rental Index, and provide the necessary legal documentation. By doing so, landlords can maintain a competitive edge in the market while also upholding the rights and interests of tenants.