Dubai-His Highness Shaikh Mohammad Bin Rashid Al Moaktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has announced that the rent increase caps for 2010 remain at the same rates as 2009.
Endorsed by the Real Estate Regulatory Authority (RERA), the rent cap states the maximum increase in rent landlords can impose each year.
The 2010 figures have been formed following the trends shown in RERA’s latest rental index. It states that increases can only occur if the property is more than 25 per cent below the average index price.
If the rent is 26 per cent to 35 per cent less than the average rent for a similar property, the maximum increase will be equivalent to 5 per cent of the rent value of the year 2009.
If the rent is 36 per cent to 45 per cent less than the average rent for a similar property, the maximum increase will be equivalent to 10 per cent of rent value of the year 2009.
If the rent is 46 per cent to 55 per cent less than the average rent for a similar property, the maximum increase will be equivalent to 15 per cent of rent value of the year 2009.
If the rent is less by a percentage that is more than 55 per cent of the average rent rate, a 20 per cent increase is permissible.
“I think the decision to keep the rental cap the same as 2009 is good as it keeps the market in the same condition and doesn’t have that much of an impact as of now.” Sudhir Kumar, managing director of Realtors International told Gulf News.
The decree was implemented to curb the sky-rocketing rents and to regulate relations between landlords and tenants.
“It’s a positive move because it shows that regulatory operations are taking charge. However, there should be more enforcement on the individual landlords who are still breaking the values of the caps and are not abiding to the decree. A closer eye should also be kept on the fluctuating prices with the rent cap keeping up to speed.” said Mohanad Al Wadiya, managing director of Harbor Real Estate.