Two months after the introduction of Dubai’s new RERA Rental Index, eviction notices from landlords remain prevalent. Despite the index allowing landlords to adjust rents to market rates, many still prefer to evict tenants to reset rental agreements. These landlords often offer financial incentives to expedite the 12-month notice period.

Dubai Landlords

For instance, some landlords are willing to pay a portion of the increased rent on the tenant’s new property to speed up their departure. One tenant in Creek Harbour reported their landlord covering over 50% of the higher rent on a new apartment to avoid waiting the full year. However, such generous offers are rare, with most landlords seeking to reclaim their properties quickly for financial gains.

The persistence of eviction notices is driven by landlords’ desire to sell their units, move back into their homes, or undertake major renovations. This trend indicates that the new RERA index has not significantly deterred evictions. Instead, landlords are using both rent hikes and evictions to maximize their returns.

Dubai’s tenancy laws mandate that landlords issue a 12-month notice for evictions related to personal use, sale, or substantial renovations. Interestingly, there has not been a notable increase in landlords seeking rental valuations from the Dubai Rental Disputes Center, despite the new index.

According to Anisha Sagar, Director of Property Management at Allsopp & Allsopp Group, landlords must apply for a rental adjustment case to receive a fresh assessment. If the judge’s verdict is favorable, they can then request a rental valuation. However, the permissible rent increases are capped based on the property’s current rental value relative to the market rate.

The regulations allow for no increase if the rent is within 11% of market value, a 5% increase if 11-20% below, 10% if 21-30% below, 15% if 31-40% below, and a 20% increase if more than 41% below market value. Even with higher valuation certificates, landlords must adhere to these limits.

In conclusion, the new RERA Rental Index has not curtailed the issuance of eviction notices by Dubai landlords. While some offer incentives to accelerate tenant departures, the underlying motive remains financial optimization, whether through rental adjustments or property reclamation for personal use or sale. The market’s response suggests that, despite regulatory efforts, landlords are finding ways to navigate and capitalize on the rental landscape.

Real estate experts highlight that this behavior is indicative of landlords prioritizing immediate financial returns over tenant retention. Many tenants feel the pressure to comply with eviction notices due to the financial strain and uncertainty of legal disputes. This dynamic underscores the complex interplay between regulatory measures and market forces in Dubai’s real estate sector.

RERA’s introduction of the new Rental Index aimed to create a balanced and transparent rental market. The intent was to provide a standardized reference for rental values, thereby reducing arbitrary rent increases and enhancing tenant protection. However, the on-ground reality reveals a more intricate scenario where landlords’ strategies adapt swiftly to regulatory changes.

Looking ahead, the effectiveness of RERA’s measures will depend on robust enforcement and possibly further refinements to the regulations. Both landlords and tenants are keenly observing the evolving landscape, with tenants hoping for greater stability and landlords seeking to optimize returns within the regulatory framework. The Dubai real estate market, known for its dynamism, continues to evolve, reflecting broader economic trends and regulatory impacts.