Dubai has many strict and straightforward real estate laws, and the government has been trying to make them easier daily to attract FDI and make their city a trading, business, and investment hub.
RERA is one of its prime examples. RERA stands for Real Estate Regulatory Agency. On the 31st of July 2007, the Dubai government created this agency to mediate and regulate between the buyer and seller real estate affairs.
But how does this RERA rental increase calculator work in Dubai? It is not as complex as it may sound. You need complete knowledge of it if you’re looking to buy, sell, or rent property in Dubai.
In most households, the rent usually takes the biggest pie of the monthly budget, and for many middle-class families who live paycheck to paycheck, saving money is paramount.
RERA was founded to address such issues between tenants and landowners, buyers and sellers, and all other real estate-related issues. Let’s discuss the details of this agency.
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What Is RERA? How Does It Work In Dubai?
In simple words, RERA is an agency/branch of the Dubai Land Department, which was created on the 31st of July 2007 to mediate and regulate all kinds of real estate matters.
All matters like renting, buying, selling, and leasing property in Dubai are handled by RERA (Real Estate Regulatory Agency).
RERA also helps tenants to know if they are underpaying or overpaying the rent. A landlord has to comply with RERA’s rules while increasing rent every time and can be held accountable if he fails to do so.
What Is RERA Rental Increase Calculator? How To Use It?
Besides mediating and regulating real estate matters, RERA is responsible for constituting Dubai’s Rental Price Index yearly.
All the changes in the rents across all the rental properties in Dubai comply with the average rental prices of Dubai’s rental price index to maintain transaction transparency between tenants and landowners.
All the residents of Dubai (and the UAE, by extension) can access this index online through the Rental Increase Calculator.
Using the rental increase calculator or RERA calculator, Dubai residents can calculate the actual rent in their area, and by doing so, they can know whether they are paying average rent and also see the average anticipated rent in the next year.
Not only that, foreigners coming to Dubai can see which area suits them perfectly to rent a property using the RERA calculator.
The RERA calculator helps maintain transparency, and tenants can get the best deal for themselves.
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How To Use RERA Calculator?
It is extremely easy to use the RERA calculator online, and a few right clicks would do the job.
RERA calculator compares and calculates the cost of your property and other nearby properties in the same area.
However, before beginning the calculation process, you must have the details of the below-mentioned documents.
- The number of bedrooms in the house/apartment.
- Type of the real estate: Is it an apartment or a villa?
- Current contract expiry date.
- How much is the current yearly rent of the property?
- Is the property industrial, commercial, or residential?
- Is the property freehold or not? And the property area.
These are some things that you must know the detail of before calculating the rental price in your area. Now that you have the required details, we can begin the process.
- You’ll need to open the official RERA Calculator site on your device.
- All the details you need to fill in will appear in front of you.
- Choose which type of property you want to know the details of.
- Then enter/fill in all the above-mentioned necessary document details wherever required.
- Then, simply select the “Calculator Rental Increase” option after filling in the details at the bottom, and you’ll get the details, including the average annual rental number, on your screen.
After the calculation, you’ll be able to see the average yearly rent of your desired property in your desired area and the statistics about the rental increase in the next year.
Suppose you are interested in renting villas or apartments in Dubai’s posh areas like Palm Jumeirah, Dubai Marina, and Downtown Dubai. In that case, the RERA will tell you about the real cost you’re renting.
You can then put in the real cost of that property with other required details to calculate the actual annual rent in that area. That way, you can ensure your landlord isn’t overcharging the rent.
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How Do Landlords Increase Rents In Dubai? What Rule Must They Follow?
First and foremost, the most important rule landlords have to follow is that they have to notify the tenants 90 days (3 months) before increasing the rent.
If he doesn’t do that by any chance, the tenants can lodge a complaint and refuse to accept the increment in the rent.
When increasing rent, landlords have to comply with some rules laid out by RERA. Those rules are:
- If you are paying less than 20% to 30% of the average rent in that area, the landlord can increase the rent by around 10%.
- If you are paying less than 30% to 40% of the average rent in that area, the landlord can increase the rent by around 15%
- If you are paying less than 40% of the average rent in that area, the landlord can increase the rent by around 20%.
- And if you’re already paying the average annual rent of that area, the landlord can NOT increase the rent until the next rental price index is released in Dubai.
These are the latest rules of Dubai’s rental price index, and if the tenant or landlord refuses to comply with these rules, the other can lodge a complaint against him.
Important Things To Remember While Renting/Leasing A Property In Dubai:
There are some recommendations that both parties (tenants and landowners) must remember while signing the contract.
- Remember to use the RERA calculator to negotiate the rent in an area and trust RERA’s calculations.
- If a landowner wants to increase the rent, first, he should use the RERA calculator to see if he can do that or not, based on RERA’s rules.
- A tenant should use the RERA calculator to check the latest updated Dubai rental price index to see whether the rent is reasonable.
In simpler words, tenants and landowners should remember that if a landowner wants to increase the rent, he has to give tenants a notice 90 days (3 months) before doing so.
And the landowner can only increase the annual rent if the current rent of his property is 21% less than the average annual rent in that area, as per the latest RERA law.
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FAQs:
What Can A Tenant Do If A Landlord Doesn’t Follow RERA’s Rules?
The Dubai government has some strict laws to safeguard tenants’ basic rights. The law is the same for Dubai residents, expatriates, and foreigners.
If the landowner isn’t complying with RERA’s rules and regulations, you can simply reject or ignore his rent increase and lodge a complaint against him.
However, if the problem still persists, you can go to RDC (Rental Dispute Center) and file a complaint there. They will help you solve this issue.
Can A Tenant Refuse Rent Increase?
Yes. If the landowner is not following RERA’s rules and increasing the rent to his wish, the tenant can refuse the rent increase and lodge a complaint against the landowner.
And until the dispute is resolved, the tenant will have to pay the current agreed-upon (RERA-regulated) rent.
Final Thoughts:
All you need to know about RERA and the rental increase calculator. Let’s sum things up to understand better.
What is RERA? RERA (Real Estate Regulatory Agency) is a branch of DLD (Dubai Land Department) tasked with the regulation of real estate laws in Dubai and mediation between two parties on all real estate matters (selling, buying, renting a property) in Dubai.
What Is Rental Increase Calculator (RERA Calculator)? The RERA calculator is used to see the average annual rent in an area to see if the landlord is asking for reasonable rent.
If you have any questions about real estate in Dubai, you can contact RAS Properties. I hope you find this article helpful. Let me know your thoughts in the comments.
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