Demand for rental housing abroad is growing as working remotely and other hybrid working formats become more and more popular. Dubai, which has become a major business hub, is playing a special role. Many investors and businessmen either live there full-time or at least rent micro-units. We will look here at the laws on regulation of the tenancy market in Dubai, and clarify what is required of tenants and landlords, and the instances where a tenant may be evicted.
The Rules and the RERA: How the Tenancy Market is Regulated in Dubai
The Real Estate Regulatory Agency (RERA) was founded in Dubai in 2007 to protect the interests of owners and tenants. RERA creates the legislative framework for lease relations in Dubai and outlines the roles, rights and obligations of landlords and tenants in a bid to minimize conflicts arising from miscommunication. This is particularly important as many landlords and tenants in the UAE are foreigners.
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The key regulation document applied by RERA is Tenancy Law No. 26 dated 2007, which oversees the tenancy rules in Dubai. It does not apply to hotels or the real estate freely provided to employees by their companies.
It is worth noting here that all real estate owners must register tenancy agreements with RERA through the Ejari online service. As a result, tenants are protected from a fraud common in other major cities, where a flat is “let” to multiple people at once, whereupon the landlords vanish with the money.
Obligations of Flat Tenants and Landlords in Dubai
According to RERA laws, the landlord in Dubai is required:
- to provide the premises in a state that is suitable for accommodation;
- to transfer it to the tenant for full use;
- to eliminate any damages not attributable to the tenant;
- to carry out repairs where necessary.
The tenant is in turn required:
- to use the property in accordance with its specified designation;
- to pay the rent on time;
- to pay for utilities (unless a different arrangement has been specified);
- to return the property in the condition in which it was received.
The Most Frequently Asked Questions about RERA and Tenancy Rules in Dubai
We will consider here the most common questions raised by landlords and tenants. They are already answered in RERA’s legislative documents.
How do you terminate a tenancy agreement ahead of schedule? The tenancy period must be indicated in the agreement. According to Article 6 of RERA Tenancy Law No. 26 dated 2007, a tenancy agreement may be renewed. The tenant must notify the landlord of their intention to renew the contract at least 90 days before the expiry of the tenancy period.
The tenancy is renewed for one year or for the period specified in the agreement, whichever is less. If the agreement was signed for eight months, the lease is automatically renewed for eight months; if the agreement was signed for 18 months, the lease can only be automatically renewed for one year.
Instances when the tenancy agreement is not renewed:
- The owner announces plans to move into the flat and remove it from the tenancy market.
- The owner decides to sell the property.
- The owner intends to carry out renovations which might prevent the tenant from using the flat according to its designation during the work.
- The property is a villa that the owner has decided to demolish and rebuild. Naturally, in this case the tenant can no longer live there and the tenancy agreement will not be renewed for a new period.
In all the above cases, the owner must notify the tenant of their intentions in advance.
What happens if the owner decides to sell the flat? If the ownership of the flat changes, it has no effect on the tenant, who is protected by RERA Law No. 26. The tenancy agreement remains in effect regardless of whether the flat is sold or inherited in the event of the owner’s death.
Can anything be changed in the flat, and who performs repairs? At the end of the tenancy agreement, the tenant is required to return the property to the owner in the same condition in which it was received at the time of the signing of the agreement. The landlord may turn a blind eye to minor damages not attributable to the tenant. However, if the damage is serious, the landlord may use the insurance deposit to cover it. In case of a dispute (for instance, if the owner refuses illegally to return the deposit on the expiry of the tenancy period), RERA will become involved. At any rate, the tenant must obtain the owner’s approval before making any changes to the rented property.
We would like to point out here that the tenant has the right to ask the owner to perform major renovations if the apartment is not fit for use. By law, the tenant is not required to perform or pay for any repairs, unless the owner and the tenant have come to such an understanding and concluded a separate written agreement to this effect.
Unlike repairs, the tenant may be held responsible for furnishing the flat. Landlords may let unfurnished flats that tenants then furnish in their own taste.
Can the owner increase the rent? The rent cannot be increased during the first three years. On the expiry of this period, the rent can be increased. First of all, however, the owner must send such a request to RERA and check the rate of increase in the rent, using a special calculator.
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The rent may be increased by 5% to 20%. The maximum increase applies if the rent is lower by 40% or more compared to the market value. To get an idea of the potential increase in rent when the tenancy agreement is renewed, you can use the Rental Index calculator on the website of Dubai Land Department. The calculator will determine the highest possible rental increase based on the market value in the area, the type of real estate, the tenancy period and the current rent.
The landlord must notify the tenant of the rent increase at least 90 days prior to the renewal of the tenancy agreement. The tenant may accept or refuse the rent increase, and must notify the landlord of their decision at least 60 days prior to the expiry of the agreement.
Settlement of Disputes Between the Tenant and the Landlord
Let us assume that the tenant and the landlord have a disagreement and are unable to find answers to their issues in the concluded tenancy agreement or in legislation. If they fail to come to an agreement, one or both parties can involve the authorities. To do so, they must send a formal request to the Dispute Settlement Centre of Dubai Land Department which handles tenancy issues.
As a technologically advanced megalopolis, Dubai has an app that can be used to cover complaints called The Smart Judge. It informs the owner and the tenant of the terms and conditions of the tenancy agreement and of their rights and obligations, and lets them know if they have grounds to apply to a court in the given situation.
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In a Nutshell
In Dubai, the tenancy issue is regulated through RERA. As a result much of the anxiety around any disputes is eliminated. The law protects both parties from fraud and uncomfortable conditions. So both before and during the tenancy period it is essential to operate legally and contact the Land Department where necessary.
Cover photo: Laura adai (Unsplash)
