Wednesday, 22 April 2015

Rental Increases – James Berry Law.

There has long been a disparity between the ability of landlords to increase the rent paid by tenants residing in the DIFC free zone and those in the remainder of Dubai. The rent cap applied generally in Dubai was not previously applicable to tenancies in the DIFC free zone and, as such, tenants there had little or no protection against increases in rent on renewal of the tenancy contract. However, since Dubai Decree No. (43) have now been addressed somewhat.

The Decree places tenants located within the DIFC free zone on a more equal footing with those outside of the free zone. The new Decree outlines the maximum percentages of increase in property rent which are allowed upon the renewal of tenancy contracts (unless agreed otherwise between the landlord and tenant), and are to be implemented with immediate effect. The maximum permissible increases in annual rent which can be applied by a landlord on renewal of the tenancy contract are: