Use the RERA Index to Avoid Unnecessary Arbitrary Rental Increases

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A growing concern for tenants in Dubai tends to be around the time for the annual tenancy contract renewal. And with good reason: how do you really know if your landlord is citing a rate that falls in line with the current market value?

You might hear real estate companies in Dubai saying the index does not comply with actual market trends, still, you need to do your homework and ensure that your landlord doesn’t quote something that’s above what has been stipulated by the law.

This is where the RERA (Real Estate Regulatory Agency) rental index comes in. Simply go to the RERA Rental Increase Calculator and do a little digging. This is a great tool that lets you know what the rent should be according to your area and accommodation. It also indicates if you are eligible for a rental increase and by what percentage.

If your landlord is demanding or being persistent on a rental increase that’s higher than the calculator suggests, you should register a complaint with the Rent Committee. It’s always good to plan ahead and work out your rental hike at least a few months in advance in order to better manage finances.

Know Your Rights as a Tenant

It may be possible your landlord is quoting a higher figure than the property for rent in Dubai market value. You need to know what your rights are as a tenant. Some landlords will inevitably quote a higher rent than legally permissible – as a tenant, your know-how on rental matters or law may be tested just to see if the landlord can actually pull it off.

For a fact, a number of landlords have demanded increases that fall outside the legal sphere, hoping that tenants will either not have adequate knowledge of the law governing rental agreements, or simply not motivated enough to challenge it through a rental dispute center.

Know the Ins and Outs

While Dubai property owners can quote a figure that complies with the market, they cannot ask for something that’s higher than what the RERA calculator indicates, when we speak of negotiating anannual rental renewal agreement.

If the landlord still persists on asking for a rental rate increase that’s out of whack with the RERA index, and negotiations are at a stalemate, the best course of action is to register a case with the Rental Committee.

You should also know that this is a win-win situation for you – landlords cannot forcibly demand a rent increase that doesn’t comply with the index. So you should know there is no compulsion at all to agree on rents that are above the index; the landlord cannot take a legal stance to enforce an increase.

Is the Rental Index System Perfect?

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As of late, the RERA rental index has drawn criticism for not being 100% in sync with actual market value; it does not take into account, structure age, unit size, views or the floor, for instance. These factors do influence the price of a property and in turn, the rent.

The way this index works is that it makes a general assessment of units, location-wise. In addition, there’s a three to six month lag relative to the real estate market. It tends to play catch up, which quite frankly, is the case with any index.

In essence, the RERA rental index reflects deals over the last quarter though it is updated on an annual basis. To counter this lag, you should always check with the calculator at least six months in advance, before your rental agreement renewal. This way, you’ll have a fair idea of what the rental increase value should at least resemble.

This so-called lag shouldn’t be a major issue as its an overall average based on market transactions. Make sure you hire an established real estate agency in Dubai to work the ins and outs for you and make sure you are only paying what’s termed legal by the law.

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