The consistent evolution of the Dubai Real Estate market over the past few decades has increased the dynamism of the city worldwide. In its tireless struggles to enhance organization, fairness, and transparency, the Government of Dubai has been introducing constant initiatives, the most advanced of which include the Real Estate Regulatory Authority (RERA).
RERA has further improved market transparency through programs like the RERA Rent Increase Calculator, specifically programmed for landlords and tenants.
This instrumental tool enables both parties to settle rent adjustments based on the current market trends and regulations directed by the RERA index.
With Dubai's real estate sector's seamless growth, fluctuations in rental prices are a common factor, and the RERA Calculator ensures that these alterations are aligned with the regulations.
Understanding how the RERA index and associated calculator function is crucial whether you are a landlord seeking to adjust rental rates or a tenant wanting a lease renewal.
We will explain everything you need to know about the RERA rent increase calculator, its significance, usability, and the legal impositions of rental decrease or increase in Dubai.
This guide is compiled to ensure a detailed understanding of how to use this tool and how it affects your rental experience in Dubai.
What is the RERA Index Calculator - An Overview
The Dubai Land Department's subsidiary, RERA, has released a government-regulated guide to provide a benchmark for rental prices in Dubai across various types of properties, categories (commercial, residential, or industrial), and locations.
RERA is responsible for ensuring consistency and transparency in rental contracts, and the RERA Index serves as an elementary tool to determine the permissible rental decrease or increase through the RERA Index Calculator.
His Highness Sheikh Mohammed Bin Rashid Al Maktoum took the initiative in 2013 to prevent illegal rental increases in the Dubai property market. With the issuance of Act No. 43 of 2013, the Dubai rental market began to be regulated by the average annual rental index.
The rental index calculator updates yearly, whereas the RERA Index also decrees a statute declaring rental policies that remain valid for the whole year.
This annual update reflects changes in market trends and conditions and provides a reference point for rental values. This initiative prevents the Dubai rental market from unfair practices, providing a safe platform for both tenants and landlords.
The tool is helpful for tenants as it protects them from arbitrary rent hikes while ensuring a regulated rental income for landlords.
Using the RERA Calculator is straightforward and requires specific details such as the location of the property, current rent, and the type of property.
The RERA index calculator assesses whether a decrease or increase is permissible under the current market trends, providing a justified platform to prevent associated disputes.
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How to Use RERA Rent Increase Calculator
Using the RERA Rent increase calculator requires no specific art and is a simple process. To know the average rental rate of your property, you can use two sources;
- Visit the Dubai Land Department webpage.
- Install the Dubai REST App on your devices.
Here's a step-by-step guide on how you can inquire about the rental index through the Dubai Land Department;
1. Visit the Dubai Land Department webpage: Once you have access to the official website, the DLD Dashboard will open, suggesting various services. Click on "Inquire about Rental Index."
2. Select the Property Type: Upon opening the inquiry tab, click on the real estate type (residential, commercial, industrial, or staff accommodation). Afterward, an information box will open, requiring you to put specific details regarding the property to evaluate accurate results for you. The detailed requirements are;
- Contract End Date
- Property Type
- Area
- Number of Bedrooms
- Current Annual Rent
3. View the RERA Index Results: After entering all the necessary information, confirm your human verification and click "calculate." The calculator will access the results and determine whether and how much the rent for the upcoming lease renewal can be increased.
4. Determine the Rental Increase: The index calculator will determine whether the rental increase is permissible under the RERA Index. If the increase is allowed, the calculator will indicate three articles;
- Amount of Increase
- Percentage of Increase
- Rent Amount after increase
This service is particularly valuable for tenants who want a guarantee of their landlord's rental agreement compliance with the law and to check if they are charging more than the allowed limit.
The tool is equally helpful for landlords to verify the rent increase allowed under the government's regulations.
Factors to Consider While Using the RERA Rental Index
The RERA Rental Index is an integral RERA rental increase calculator component. The index categorized properties into numerous classifications to establish a proper average rental price for each category in Dubai.
The average rent calculated by the RERA Index Calculator also differs with the area where the property is located. Let's look at specific requirements for each category besides the general requirements mentioned above;
- Apartments - Calculates rent on the basis of number of bedrooms.
- Villas -Calculates rent on the basis of number of bedrooms.
- Commercial Category—This splits into sub-categories, including Commercial villas, shopping centers, offices, retail, warehouses, workshops, or showrooms. For instance, if you choose a shopping center, the details will require the mall unit type and name.
- Industrial Properties – This will require entering the area/sq.ft.
1. Non-Considerable Aspects
In addition to the given information, it is important to remember that the RERA Index doesn't consider certain articles, including;
- Water and Electricity Facilities
- Age of the Unit or Development
- Condition of the Building
- Number of Floors
- Amenities Granted
The RERA Index maintains equilibrium in Dubai's rental market by avoiding unreasonable lease increases and ensuring compliance with current market conditions. This beneficial tool guarantees a transparent platform for rent adjustments.
Key Legal Guidelines for Rental Increases in Dubai
It has already been stated that the RERA Index updates annually, so you don't need to worry about its accuracy.
Besides the factors considered for the RERA Index, including property type, bedroom number, location, and other aspects, the RERA Index calculator also has several other implications.
- If the rent is 10% lower than the average market value, the landlord cannot increase it.
- Landlords can increase the rent by 5% if the current rent is 10-20% lower than the average market value.
- Landlords can increase the rent by 10% if the current rent is 20-30% lower than the average market value.
- Landlords can increase the rent by 15% if the current rent is 31-40% lower than the average market value.
- Landlords have the permission to increase the rent by 20% if the current rent is less than 40% of the current market value.
These guidelines ensure that tenants are not subjected to excessive rent increases and provide clear rules for landlords to adjust their rents based on the current market value of the property.
1. Case Example
Suppose a tenant rents a 2-bedroom apartment in Dubai Hills Estate. So, in 2024, the average rental rate lies between 100,000 and 106,000 AED yearly.
In another instance, if the tenant already occupies the same property, it means that the rental rate is 40% less than the current market value, and in that case, landlords have the right to increase rental prices by up to 20%.
However, the RERA Index Rental Increase Calculator is a flexible tool that is reliable for its accurate, real-time results. So, you can extract data regarding rental rates anywhere and anytime.
2. Eligibility Criteria for Rental Increase
Do you want to increase the rent? Then, you must follow a directed procedure to eligible increase the rent on your tenants.
RERA has regulated the proper direction for increasing the rent. This method is imposed to ensure the smooth running of the Dubai rental market.
If the property is permissible for rental increase, the landlord should send a notice stating that the lease will renew after 90 days.
If the tenants do not receive proper notice from the landlord before 90 days, they are not obliged to accept the lease renewal notice.
RERA Index Calculator – 2024 Update
RERA enacted a new rental law limiting landlords' authority on rental increases. The new act states that landlords can increase the rent once a year upon lease contract renewal and must do so in accordance with the RERA Index Calculator. Moreover, a 90-day prior notice is obligatory upon landlords before increasing the rent.
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Benefits of Using the RERA Rent Increase Calculator
Using RERA rent increase calculators comes with various benefits. Some of these benefits include;
- Legal Compliance: Dubai's dynamic environment ensures the inclusion of laws in every aspect. Thus, the RERA Index ensures compliance with the rental laws for both landlords and tenants. Leveraging the accurate use of a calculator can prevent legal disputes over rental increases.
- Transparency: The data-driven results of the RERA Index confirm transparency and portray a clear determination on the justification of rental increases.
- Time-Saving Tool: Instead of relying on outdated information, indulging in illogical arguments over rental increases, or manually calculating rental increases, the RERA Index calculator offers quick results, saving time for both parties.
- Fairness for Landlords: Landlords can confidently increase the rental price of their properties by calculating the charges from the RERA Index Calculator. The tool also ensures a fair charge and competitive rent rates for landlords.
- Security for Tenants: The optimal use of the RERA Index calculator offers tenants peace of mind and guarantees that their rental rate is settled through market-driven factors. It is a legitimate tool and does not involve any arbitrary decision by the landlord.
How to Appeal a Rental Increase in Dubai
Despite the strict laws and proper guidelines imposed by the Dubai Land Department on the justifiable and legal increase of leases, certain landlords force a rent increase beyond the allowed limit or at a time when it is not allowed. Such cases can give rise to rental disputes.
If tenants believe their rental increase is unfair, they have the right to appeal the decision. By following the steps given below, you can proceed with your appeal:
- Review the RERA Index: It is crucial to ensure the rental increase determined by the landlord exceeds the average limit. Before filing for the appeal, you can check and confirm the average rental increase through the RERA Index Calculator.
- File a Complaint with RDSC: The Rental Dispute Settlement Center (RDSC) is set by H.H Sheikh Mohammed Bin Rashid Maktoum to settle rental disputes for social & economic stability and protection of the parties' rights. Tenants can file a complaint with RDC if the rental increase is unfair to them. The Rental Dispute Settlement Center will review the case. After the case is reviewed, RDC will provide a lawful decision under the RERA guidelines, ensuring a legally binding decision for both parties.
- Presenting Supporting Documents: Tenants should attach supporting documents when applying for an unreasonable rental increase appeal. The supporting documents include the rental contract, RERA Calculator results, and correspondence with the landlord.
- Wait for the Decision: After filing the case, the RDC will issue the decision under the presence of evidence. The decision announced by RDC is irrevocable by tenants and landlords alike.
Closing In
The RERA rent increase calculator is a significant tool for everyone actively involved in the Dubai real estate market. The RERA Index provides reliable and latest data, ensuring a transparent method for determining whether a rental increase is fair.
The tool is beneficial for both landlords and tenants and ensures a reference point to adjust rents justifiably. Navigating the accurate function of the RERA index calculator can help save both parties from associated disputes and ensure regulatory compliance with the city's stringent laws.
If you want to adjust rents as a landlord or want assurance that your rent is fair as a tenant, the RERA Index is your go-to tool.
This government-regulated tool indicates rental increases based on current market data and aligns with the regulations implied by RERA. With accurate and reliable rental inquiries, the tool ensures a lawful and smooth rental contract for all.
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