Rent Increases and Eviction Notices: Key Legal Rights for Landlords & Tenants in UAE

One of the most frequently asked questions concerns the rights of landlords and tenants regarding rent increases and eviction notices in the UAE.

The lack of clarity around these issues has caused many tenants, unaware of their legal rights, to fall victim to arbitrary or unfair actions by their landlords.

This article aims to provide a comprehensive overview of both landlords' and tenants' rights and to clarify the legal process surrounding rent increases and eviction notices.

For this update, it is important to highlight two key laws:

* Law No. 26 of 2007 on the Organisation of the Relationship between the Lessors and Tenants in the Emirate of Dubai – the original Landlord and Tenant Law.

* Law No. 33 of 2008 (Landlord and Tenant Law), which brought in amendments to the 2007 law and is the law in use today.

The Rent Freeze Announcement

In January 2021, the Dubai Land Department (DLD) announced that a new law could be passed that would freeze rental agreements for three years.

However, specific details of the implications were not included. Tenants, pleased by this announcement, expected their current rental agreements to 'freeze' without due research or consideration.

This confusion led to many tenants not taking proper action to negotiate their rental agreements with their landlords, resulting in disputes and cases for the Rental Dispute Committee (RDC) to resolve.

As of the date of this publication, the law announced by the DLD has not yet been enacted, meaning rents have not been frozen.
The law governing the landlord’s right to increase rent is still the amended Landlord and Tenant Law (2008), i.e., the same regulations apply as before the DLD announcement.

Has There Ever Been a Rental Freeze?

The original 2007 law did provide an explicit rent freeze for tenants. Article 9 of the 2007 law stated: “Landlord and tenant must specify a rent value in the tenancy contract, and in all cases, it is impermissible to increase the rent or modify any terms of the lease except after the expiration of two full years from the date of the commencement of the rental relationship.”

However, the 2008 amendments eradicated the rent freeze and allowed landlords to increase rent after the first year of the tenancy (unlike other Emirates), provided ninety (90) days’ notice was given.

While landlords have the right to increase their rental yield after a year, this increase is regulated by the DLD, considering market conditions, similar rent yields, and several other factors.

Under What Circumstances Can a Landlord Increase the Rent?

The Dubai Government issued Decree No. 43 of 2013 on the Determination of the Increase in Real Estate in the Emirate of Dubai. This decree provides landlords with a maximum rate of increase in rent according to the average market price of similar properties within a certain area. Tenants should know the following:

* No rent increase is permitted if the current rent is less than 10% below the average market rental rate.

* A maximum of 5 per cent increase is permissible if the current rent is 11 per cent – 20 per cent below the average market rental rate.

* A maximum of 10 per cent increase is permissible if the current rent is 21 per cent – 30 per cent below the average market rental rate.

* A maximum of 15 per cent increase is permissible if the current rent is 31 per cent – 40 per cent below the average market rental rate.

* A maximum of 20 per cent increase is permissible if the current rent is more than 40% below the average market rental rate.
Tenants who are unable to manually determine their exact rental increase can either download the Dubai REST application on their smartphones or use the rent calculator found on the DLD website.

In the event of a disagreement between the landlord and tenant over the rent increase, either party has the right to refer their dispute to the RDC. The RDC shall determine the allowable rent increase by the provisions of the Decree.

When Can a Landlord Evict a Tenant?

Firstly, it is important to stress that a landlord cannot evict a tenant simply to re-let the property to someone else. This is not allowed, even if the landlord begins work on a new independent structure. If the eviction occurs, the landlord is prohibited from re-letting the property for two years.

Additionally, the landlord must prove that they do not own another suitable property that can be used instead. Should the landlord re-let the property after eviction, the tenant can file a case at the Rental Dispute Committee (RDC) and seek compensation.

The actual amount of compensation is determined by the judge, but historically, it has often equalled the original rent amount. However, the exact amount is at the judge's discretion.

There is no way to prevent the landlord from re-letting the property after vacating other than informing them of the tenant's rights and the landlord's obligations under the law. If the landlord ignores these legal requirements, the tenant can gather proof and file a case at the RDC.

It has become common for some landlords to seek to evict their current tenants to chase higher rental yields. In one rare case, a landlord even served an eviction notice a day after signing a new tenancy contract.
It is also common for tenants to receive their notice of eviction through emails or WhatsApp messages.

The 2008 Landlord and Tenant Law makes it clear that if a landlord wishes to evict a tenant, the landlord must serve the eviction notice through a notary public or by way of registered mail, providing reasons for the eviction.

The 2008 Landlord and Tenant Law outlines when landlords can evict their tenants, distinguishing between evictions before the lease expires and evictions upon lease expiry.

If a landlord wishes to evict a tenant to sell the property, they must do so through a notary public or registered mail, providing a 12-month notice period.

An email from the landlord requesting eviction is not legally sufficient. Vacating the property early is entirely up to the tenant.
If the tenant does not wish to leave, the landlord can only evict them by sending the 12-month notice. Otherwise, the landlord cannot forcibly evict the tenant, as the tenant has the right to stay.

Eviction Before Lease Expiry

The Landlord and Tenant Law provides an exhaustive list of reasons for which a landlord is entitled to evict a tenant before the lease expires. These include:

* The tenant fails to pay rent even after thirty days of notification.

* The tenant sublets the property without the landlord’s consent.

* The property is used for illegal purposes that violate public order and morality.

* The commercial property is left vacant for thirty consecutive days or ninety non-consecutive days in one year.

* The tenant’s actions endanger the safety of the premises or cause damage due to intentional or gross negligence.

* The property is used for purposes other than those agreed upon or violates planning and building regulations.

* The property requires urgent repairs as proven by a technical report approved by Dubai Municipality.

* The tenant fails to abide by legal obligations or lease terms even after receiving a thirty-day notice.

* The government requires the demolition of the property.

These provisions provide landlords with recourse if the tenant breaches their lease obligations and fails to rectify the situation upon notice.

Eviction Upon Lease Expiry

Even upon lease expiry, landlords must adhere to certain parameters to evict a tenant. The notice of eviction must be served through a notary public or registered mail, outlining the reason(s) for eviction.

Additionally, the landlord must provide the tenant with twelve (12) months’ notice before the eviction date. Reasons for eviction upon lease expiry include:

* The landlord desires to demolish the property for reconstruction or to add new buildings, provided relevant approvals are obtained.

* The property requires renovation or extensive maintenance that cannot be done while occupied, as proven by a technical report from Dubai Municipality.

* The landlord wishes to use the property for their use or by a family member up to the first degree, provided they do not own another suitable property.

* The landlord intends to sell the property.

Conclusion

The laws in the UAE clearly outline the rights of landlords and tenants, aiming to balance the powers among the parties.
Landlords have the right to increase rent, but through a regulated mechanism, tenants have the right not to be evicted unless a compelling reason is prescribed by law.

Both landlords and tenants should familiarise themselves with Law No. 33 of 2008 (the Landlord and Tenant Law) to avoid additional costs by referring disputes to the RDC.

If either party is uncertain about a certain law provision, seeking a legal professional's opinion and assistance is always best.

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