The new rent cap rule on properties announced on Monday came into effect from January 1.
His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, has issued a decree on Monday saying that rent increases "shall not exceed seven per cent of the annual rent of the property".
The new rule applies to all rent contracts that are to be renewed in 2007 on condition that no rent increase was made on that particular property during 2006.
It means that the tenants, whose rents were increased in 2006 will not face another rent increase in 2007. But those whose rents were not increased in 2006 can get a rent increase but not more than seven per cent of their annual rent.
Article 2 of the new decree says that no rent increase may be made in 2007 on properties whose contracts were signed in 2006 with a new tenant (no increase in rents in 2007 if the contract was signed for the first time with a new tenant in 2006).
The previous rule capping the rent at 15 per cent ended on December 31.
An official of the Dubai Rent Committee will implement the new rule.
Tenants and landlords can contact the Dubai Rent Committee in case of disputes relating to rents.
The committee has been authorised to implement the new decree ensuring that rate increases should not exceed seven per cent of the annual rent.
Mohammad Ahmad Al Shaikh, Secretary-General 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 do anything whatsoever if both landlords and tenants agree on the rent increase," he said.
He advised tenants not to hesitate to come to the rent committee if they have any complaint.
The Dubai Rent Committee's office is located on the ground floor of the Dubai Municipality headquarters on Baniyas Road. It's telephone numbers are: 04-2232766 and 04-2215555.
