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Dubai: The Dubai government has capped the annual rent increase at a maximum of seven per cent on all rental properties as of January 1.
His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, issued a decree yesterday saying the rent increase will not exceed seven per cent of the annual rent of the property, WAM reported.
Dubai was the first emirate in the UAE to introduce a rent cap in November 2005, when Shaikh Mohammad issued a decree capping the increase at a maximum 15 per cent of the annual rent. That decree ended on December 31.
According to the new decree, the rent increase must not exceed seven per cent of the annual rent of the property. This applies to all rent contracts that are to be renewed in 2007 on the condition that no rent increase was made on that particular property during 2006.
Article 2 of the new decree says no rent increase can also be made in 2007 on properties whose contracts had already been signed in 2006 with a new tenant.
The decree tasked the special judiciary committee in charge of settling disputes between landlords and tenants (Dubai Rent Committee) to come up with appropriate measures to implement the new decree, which takes effect from the date of its issuance, January 1.
Residents, realtors happy
Residents yesterday welcomed the cap, saying it will provide much-needed relief. They said it has come at the right time when rents were spiralling, forcing many expatriates to send their families home. Mohammad Kazerouni, an Iranian, said: "The 7 per cent rent cap will help many to save."
Real estate agents also welcomed the new rule, saying rent increases were not commensurate with employee salaries. Ryan Mahoney, managing director of Better Homes, a Dubai-based real estate company, said the rent cap would be good for the emirate.
"Dubai needs this kind of short-term surgical approach to the rental-control problem," he said.
"Any more than the rents are now is too much. People can't afford to accommodate themselves, and businesses can't afford to accommodate themselves," he added.
With additional inputs from Scott Shuey, Chief Business Reporter, and Sunita Menon and Daniel Bardsley, Staff Reporters
How and where to get help
Tenants and landlords can contact the Dubai Rent Committee in case of disputes relating to rents. Mohammad Ahmad Al Shaikh, General Secretary of the Committee, said the rent committee takes action on rent increase issues only if a tenant formally files a complaint with the rent committee. "We cannot, however, do anything if both landlords and tenants agree on the rent increase," he said.
He advised tenants not to hesitate to come to the rent committee because it was formed to settle disputes between landlords and tenants.
The rent committee's telephone numbers are: 04-2232766, 04-2215555. Its office is located on the ground floor of the Dubai Municipality headquarters on Baniyas Road in Deira.
"They should not hesitate to come to us as their rights are well protected under the law," he said. The committee also receives complaints from landlords against their tenants over rent disputes and other related issues.
Your comments
We all are very happy with this move
Mohammad
Dubai,UAE
This is a very kind step towards encouraging expats to continue to stay in the costly city where people earn and spend and most of their wages. Thanks a lot.
Altaf
Dubai,INdia
Its a great help for the small business section. We are worried every year becuase of increasing rents and high competition. Seven per cent is fair
Amir
Dubai,UAE
It was a good move in favour of us,
and we appreciate it.
Suresh
dubai,uae
Shaikh Mohammad like his father the late Shaikh Rashid is a real visionary.
Sooppy
Dubai,India
Seven per cent?!!?! That's too high!!!!!
Jack
Dubai,UAE
The cap should be applied as well on the rent amounts according to the areas and level of finishing. This is because the increasing inflow of expats will cause landlords will be offering higher rents to new tenants rather than maintaining existing ones; and of course there are many dirty ways that can be followed to kick a tenant out.
Sherif
Dubai,UAE
This is the best New Year gift one could wish for. Rent hikes in the last couple of years have caused much damage to the competitiveness of this beautiful city. Now people, especially the expat community can do some future planning as far as savings are concerned.
Now the government should focus on resolving the traffic problem. RTA is doing a great job.
Taimour
Dubai,UAE
It's about time they introduce a new rent cap to stop greedy landlords. The rents in the UAE are already ridiculous. I think the DRC deserves applause for standing agains violators.
Anas
madinat zayed,uae
Good
Rasheed
Dubai,UAE
The perfect New Year gift from His Highness Shaikh Mohammad Bin Rashid Al Maktoum.. Many Thanks to Him.
kshitiz
Dubai,UAE
Shaikh Mohammad really gave us a chance to keep our family here with us in Dubai. Thanks and God bless this country.
Murad
Dubai,UAE
Strongly welcome the degree by Shaikh Mohamed to fix 7 per cent ceiling on rent increase. It is a great help.
Mohideen
Dubai,UAE
Thanks a lot for this move. Being a Dubai resident for the past 11 years, I would like to request the authorities to take strict measures to implement the new decree.
Preetam
Dubai,UAE
It's a right decision at the right time, which will bring relief to a majority of people in Dubai.
Nisar
Dubai,UAE
This is great. Finally someone is standing up for consumer rights. One more thing...What about those landlords who turn around such laws by arranging to offer available flat for rent, on bed space basis, daily/monthly basis, without contract (you know, to get around the law). Those landlords and "investors" are always contributing substantially to the rent increase not only in Dubai, but in Abu Dhabi too. I'd be happy if the authorities address such issues as well. After all, it will be a benefit to both, consumers and the government itself. Is there any law similar to this in Abu Dhabi?
Halawani
Dubai,UAE
This is really good news at the start of a New Year.
Kaiyath
Dubai,UAE
Well done and thanks a lot.
Sunil
Dubai,UAE
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