Sultan Butti Bin Mejren, the Director General of the Dubai Land Department, predicted promulgation of new rental law in Dubai, shortly, pointing out that the law is complete, and all the clauses put forward by the Land Department have been granted, while making the rent fixed for three years for all leases.
“The new law stipulates that the real estate property owners may not increase the rent for residential properties before three years have elapsed since the date of signing the contract between them and tenants,” said Sultan Butti Ben Mejren.
He added, “the law is ready, and shall be enacted, following the consent on all the items provided by the Dubai Land Department, Rental Disputes Center, such as the possibility of resorting to the execution judge in the event of tenant being defaulter of rent, and including clauses that address the gaps in the previous law.
He pointed out that the new law would give a fair amount of equality to the rights of all parties, tenants and landlords. It would have provisions guaranteeing the right of tenant, and other provisions guaranteeing the right of landlord, enabling the latter to resort to the RDC Execution Judge if the tenant does not commit to paying his rent.
The three-year fixed rent will stimulate and encourage investments in the Emirate of Dubai and increase the occupancy rate of Dubai real estate properties, he said, as the rental sector represents the dominant proportion in the real estate market.
“This law will help stabilize tenants in Dubai, as it gives them a good alternative, away from moving out every year in search of cheaper properties, in addition to annual increases in rental amount, as is currently the case,” he added.
Bin Mejren underscored, “the system is in place in quite a number of countries, and a few other emirates of the UAE. Its aim is to stabilize the families, and companies, on medium level, willing to develop future plans,” stressing that stability is one of the most important yields of streamlining the property rent.
He confirmed that the new law would provide a number of benefits for tenants and landlords in the Emirate of Dubai. The tenants will be able to manage their expenses more precisely, knowing how to afford their property rent in the near future, while landlords would have a clear idea of income through their leased-out real estate properties.
Judge Abdelqader Mousa, Chairman of Dubai Rental Disputes Center, said, “the draft new rental law, expected to be approved soon by the Supreme Legislative Committee in the Emirate, confirmed that the property owners may not, for whatsoever reason, increase the rent for residential properties before the lapse of three years since the date of the beginning of the tenancy relationship between them and the tenant (three years from the date on which the lease was concluded between the parties). The rent may be increased, if applicable, after the expiry of the period in view of the average rent and in pursuant to the index determining rental amount, without a need for notification.”
“As for tenancy contract concluded prior to the new law, the rent increase will be calculated three years after the date on which the law would come into force following its approval. In that case, the rent would be in accordance with the rent index, and without a notice as well”, the RDC Chairman referred.
The new law will contribute to the stability of families and support economic activities, because many investments take quite some time to yield benefits to the investors.