Ejari online

Decree 2 2011 Dubai

To open or download the PDF version of the Decree 2 2011 Dubai (Ejari Law) regarding Rentals in the Emirate of Dubai, also called the “Rental Price cap” law, click here.

Ejari Law | Decree no. 2, 2011, Dubai

This recent law regulates rental prices and sets a caps in case of rental increase. The main points are:

• no rent increase for tenants who were leasing property units in the previous year, which includes residential and non residential properties, if the rent was equal to or 25% or less below the average similar rent;
• stated differently, rental increases can only occur if the property was more than 25% below the average index price (which has been determined by RERA).

Given this, the maximum rent increase for tenants who were leasing such units in the previous year shall abide according to these rules:

• If the rent was 26% to 35% less than the average rent for a similar property, the maximum increase shall be equivalent to 5% of rent value paid for the closing year.
• If the rent was 36% to 45% less than the average rent for a similar property, the maximum increase shall be equivalent to 10% of rent value paid for the closing year.
• If the rent was 46% to 55% less than the average rent for a similar property, the maximum increase shall be equivalent to 15% of rent value paid for the closing year.
• If the rent was more than 56% less than the average rent for a similar property, the maximum increase shall be equivalent to 20% of rent value paid for the closing year.

The “similar rent value” of the property is based on “The Rent Index of the Emirate of Dubai”, applicable on the date of renewing of the tenancy contract. RERA will review and update the Index periodically.

According to the Decree, the Real Estate Regulatory Authority shall undertake implementation of this rule, provided that it shall be issued in the official gazette and shall be effective as from the date of its issuance. This means that, until the rule is published in the official gazette, it may not be considered “effective”.

Click here to access RERA’s Rental Price Increase calculator.