x Abu Dhabi, UAESunday 23 July 2017

Homefront: can a landlord increase Dubai rent after agreeing on price?

Property expert Mario Volpi solves the dilemmas thrown up by a Dubai landlord, who wants to change the rent on a contract yet to be signed, and a tenant.

To-Let sign on one of the residential building at the International City in Dubai. Mario Volpi is here to help readers with their property issues. Pawan Singh / The National
To-Let sign on one of the residential building at the International City in Dubai. Mario Volpi is here to help readers with their property issues. Pawan Singh / The National

I am a landlord and have an apartment for which the rental agreement expires on January 31. Three months ago, I sent a notice to my tenant asking for a 5 per cent increase and a copy of the tenancy contract without my signature but for him to sign it first. Now the Rera calculator has been updated and it now allows for a 10 per cent rise instead of a 5 per cent which it showed earlier.

Am I legally allowed to ask for a 10 per cent increase from my tenant even after previously sending an increase of 5 per cent which he accepted? I have not yet picked up the cheque payment from the tenant. PR, Dubai.

You were correct to inform your tenant 90 days before the expiry of the tenancy agreement that you wished to make a change on the contract by imposing a 5 per cent increase on the rent.

The new rent decree which was announced in December changed the way landlords can ask for increases in rent. This is a guide of what you, as a landlord, can request. I stress that it is a guide only, in that you are allowed to ask up to the maximum rent percentage increase but if you choose not to impose this increase, it is up to you.

What I am trying to say is that you both have agreed on an increase of 5 per cent, now you realise that you could actually ask 10 per cent so it is up to you if you want to renegotiate again. Remember that having a good and happy tenant is very important and for the sake of an extra 5 per cent this could unstable the balance.

My advice would be to leave it as you have agreed and ask for a bigger rent increase next year as I am sure by then you will be entitled to a further increase. I repeat it is your choice.

I am a tenant in a three-bedroom apartment, paying an annual rent of Dh135,000 which is Dh15,000 higher (than the average for my area) as per new Rera index. My landlord is asking for a hike in rent by 12 per cent which is not justified. Further, the landlord has changed the renewal clause in the agreement – earlier it said he will give me 90 days notice for renewal – to “the lease is non-renewable”. He wants me to leave the apartment so that he can get a higher rent. Can the landlord have this non-renewable clause in the lease leading to my eviction or will the eviction be governed by Rera clauses even if he has this clause in the agreement and I do not want to leave the apartment. APS, Dubai

Firstly your landlord cannot unilaterally alter the contract without your consent and furthermore it is a legal requirement that any changes to the contract must also be done giving a 90-day notice period.

Any clause on a tenancy contract that states “non-renewable” is not allowed by law so even if you sign it the law does not recognise it.

The landlord cannot arbitrarily raise the rent at his will, he has to abide by the rules and regulations of Dubai and the RERA rent calculated will determine whether a rise in rent is applicable or not.

You can only be evicted by the landlord if he wishes to sell the apartment or needs to move in himself or his immediate next of kin. In both these cases, he would have to give you a written 12 month notice period document which needs to be notarised or delivered via registered mail. Remember that if he wants to move in he has to also prove that he does not own another suitable alternative property to move into.

Mario Volpi is the managing director of Prestige Real Estate in Dubai (prestigedubai.com). He has 30 years’ of property industry experience in the emirate and London. Send any questions to mario@prestigedubai.com.