His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai has issued Decree No. 43 of 2013 which sets a specific band on how the optimum rental increases that a landlord can demand while renewing leases.
The new rental slab as provided under the decree will not allow landlords to raise rents on renewals if the current lease is only 10 per cent lower than the average rent of a similar property. However, landlords can raise rents on renewals by:
5 per cent if the earlier rental is 11 to 20 per cent lower than the average rent for a similar property;
10 per cent if the rental is 21 to 30 per cent lower than the current going rates for properties of a similar scale;
15 per cent if the rent is as low as 31 to 40 per cent than comparable ones; and
20 per cent if a property’s rental is more than 40 per cent less than the average.
It will be applicable to private and public sector owned properties in Dubai, as well as — pertinently enough — within the free zones.