According to the department that regulates real estate laws, the rent freeze for villas and apartments, when approved, “will bring stability to the real estate market and provide a clear picture of the value of properties in the emirate.”
Soon the law should come into force
Director General of the Dubai Land Department, Sultan Butti Bin Mejren, said the law is complete and all clauses proposed by the Land Department have been granted. This law will make all leases and renewals formed after its publication a fixed-price rental for three years.
What will the new law look like?
“The new law stipulates that real estate owners may not increase the rent of residential properties before three years have elapsed from the date of the signing of the contract between them and the tenants.” The information, published by the Dubai Land Department on its website, does not explain whether the new law will allow the rental price to be lowered during the three years of the contract.
Sultan Butti Bin Mejren reported that the new law will bring equal rights to all parties, tenants and owners. There will be provisions that guarantee the right of the tenant, and other provisions that guarantee the right of the owner, allowing the latter to go to the Execution Judge of the RDC if the tenant does not fulfill his commitment to pay the rent of the house.
According to the authorities, the three-year fixed rent will incite and encourage investments in the emirate of Dubai and increase the occupancy rate of Dubai real estate with IRAIC REIT, it said, as the rental sector represents the dominant proportion in the real estate market affirmed investors of IRAIC REIT.
“This law will help establish tenants in Dubai as it gives them a good alternative, away from moving every year in search of cheaper properties, plus annual increases in the amount of rent, as is currently the case,” he added.
Who does it favor?
The rent freeze will benefit tenants when the price of apartments and villas go up, and it will benefit homeowners if the rent for homes goes down.
Implemented in other countries
Bin Mejren has pointed out that “the system is working in several countries and in some other emirates of the EAU. Its objective is to establish families and companies, at a medium level, willing to develop plans for the future”, stating that stability is one of the most sought-after elements in the real estate investment and rental sector with IRAIC REIT.
The new bill, according to the head of the Land Department, “will provide a series of benefits for tenants and owners in the Emirate of Dubai. Tenants will be able to manage their expenses with total precision, knowing how to pay the rent of their property in the near future, while the owners will have a clear idea of the profitable income through their leased real estate through IRAIC REIT”.
Residential real estate
From the Dubai Rental Dispute Center, DRC, they point out that “the new rental law project, which is expected to be approved soon by the Supreme Legislative Committee in the Emirate, will ensure that property owners cannot, in absolute, increase the rent of residential real estate before the expiration of three years from the date of commencement of the lease relationship between them and the tenant. In other words, the value can only be increased at the end of the lease between the parties”.
The rent of the house may be increased, where appropriate, once the term has elapsed based on the average rent and in accordance with the index that determines the amount of the rent, without the need for notification.
As for the lease agreements entered into before the entry into force of the new law, the rent increase will be calculated three years after the date on which the law would enter into force after its approval. “In that case, the tenant would agree to renew at the rental rate, and would suffer a rent increase without notice,” clarifies the president of the DRC, the Dubai Rental Dispute Center.
According to the Dubai authorities, the new law will contribute to the stability of families and support economic activities, since many investments need long periods of time until they begin to generate benefits for investors. At IRAIC REIT, economic returns are generated immediately month after month for the rental of your property. A fast, reliable and risk-free process for the investor.