Draft law proposes 3-year rental cap in Dubai

Tenants in Dubai can brace themselves for some potentially good news. The latest draft law proposes introducing a 3 year fixed rental cap in Dubai. Similar to the current three-year rent-freeze for properties in Sharjah, tenants of flats in Dubai could also look at fixed rents for a period of three years in the near future. 

If passed, there will be no rent hike in Dubai during the first three years of signing the contract. In discussion since May 2019, this proposed law is Dubai Land Department’s attempt at bringing greater stability to rental contracts and the real estate market. 

What is Included in the 3 Year Rental Cap Dubai?

Once approved, the new law will only impact the rents of apartments in Dubai. No other real estate categories are covered under the clause. Here’s what the proposed law for three-year fixed rental apartment contracts covers. 

• The owners may not, for any reason, hike rent in the first three years of entering the rental contract. Tenants can contest the unfair increases in rent, if and when required
• The owners or their representatives may not receive or demand commission (or other fees) as administrative costs from the tenant, on the signing or renewal of the rental contract.  – source Emarat Al Youm

What’s In It for Renters in Dubai?

Rent often takes up a big chunk of income for the residents of Dubai. Since most home budgets are focussed around rent, knowing that there will be no change to rent for three years is a comforting thought. The three-year no rise cap would apply to all new residential leases in Dubai and is expected to bring greater ease for the tenants.

Renters in Dubai can count on:

• The housing costs remaining the same for 3 years bringing greater surety of future costs
• A cutback on the commission and other administrative fees will make rental contracts cheaper
• Tenants can plan long-term, without the pressure of moving frequently because of change in rents

The proposed rental cap law in Dubai is currently tabled for the Dubai supreme legislation committee’s approval. While not much can be said and predicted about the future of the three-year fixed rental draft law, it could prove to be instrumental to the Dubai real estate market. 

Until the three-year no rise cap in Dubai comes into effect, everything else remains pretty much the same. Regardless of the implementation of the three-year fixed rental, Dubai Land Department will continue to monitor rental agreements between owners and tenants via Ejari registration. Make sure you don’t miss out on that!

We aim to bring you more information on real estate in Dubai and the latest happenings in the UAE regularly. Stay tuned to MyBayut for it.