Real estate in the UAE: The 90-day notice period for lease renewal has expired.

Question: I am renting a villa in Dubai, and the management company is a real estate company. Six months before the end of the current lease term, the management company notified me by email that future lease renewals would be based on the rental calculator of the Real Estate Regulatory Agency. The management company stated that they would contact me 90 days before the end of the contract to confirm whether I wanted to renew the lease. They did not specify how much the rent would increase, but said that I could check it myself. At that time, the increase was 15 percent, according to Rera data.

However, the 90-day period has expired, as the lease ends in two months, and they still haven't notified me about the new rent. I contacted the management company and told them that I want to renew, but I need to know the new rent. While I expect them to confirm the rental amount soon, I believe it will be too late, and they have missed the 90-day notification deadline. I am also concerned that the Rera calculator might assess the rent higher than the original 15 percent estimated value. Do you advise me to raise a dispute, or will I likely lose the case? DW, Dubai.

Response:

It's absolutely normal for landlords to inform tenants about upcoming rent changes earlier than 90 days in advance. The 15% increase suggested by the Rera calculator serves as a benchmark for rent at the time of contract renewal. You shouldn't worry too much about the lack of communication from the property owner at this stage, because you just need to check the Rera rent calculator again to see if the increase has changed from the 15% calculation. The owner mentioned that the Rera rent calculator will be the measure for any changes in rent, and if it increases, for example, to 20%, that will be legal. You already know that the increase is at least 15%, and in the worst case, it could reach 20%, so be prepared for that possibility. If you disagree with the rent increase, you will have no choice but to look for another rental property and move out.

Question: I live in a one-bedroom apartment and pay an annual rent of 32,000 dirhams ($8,713).

Response:

There are several points to consider here. First, changes to the contract can only occur after a notice period of at least 90 days, and all parties must agree to them. When changes affect the rent, an increase is only allowed if the Rera calculator verifies it, so you should check this information. Also, note that according to Real Estate Law No. 33 of 2008, you are not required to notify about the non-renewal of the contract. This is because your lease agreement has a start and end date, and despite the 60-day notice condition in the renewal contract, you can contest it by contacting the Rent Dispute Resolution Committee in the Deira area of Dubai. Ultimately, if you decide to renew and agree to the rent increase, you will have to pay a renewal fee of 1,000 dirhams.

Mario Volpi is the Sales Director at AX Capital. He has been working in the real estate sector for 39 years in London and Dubai. The opinions expressed are not legal advice and are provided for informational purposes only. Please send all inquiries to [email protected].

Updated: December 21, 2023, 4:00 AM.