In recent years, Dubai’s rental prices have increased rapidly owing to high demand from new residents moving into the emirate. This has forced many landlords to consider revising their contracts, and in some cases, even issue eviction notices to their current tenants to take advantage of the popularity in the property market. Not surprisingly, the legal viewpoint governing the rights of both parties has never been so important in these times of change.
Rising Rental Prices in Dubai
Rental prices in Dubai have been rising at double digits for the last three consecutive years. The reasons for this surge in prices are due to a massive migration of new residents willing to relocate to the emirate. This surge in new residents boosts demand for rental properties. The high demand prompts landlords to maximize their return on income through either resetting rental agreements or selling property.
Legal Grounds for Eviction Notices
Dubai law, Law No. (33) of 2008 Amending Law No. (26) of 2007 Regulating the Relationship between Landlords and Tenants in the Emirate of Dubai, outlines clearly under which conditions a landlord can serve an eviction notice. Landlords are permitted to serve an eviction notice in two scenarios: either the landlord is willing to sell the property or personally use the property. Several legal procedures and requirements must be adhered to:
- Notice Period: Landlords are required to give a 12-month notice period through the due process of law if the real property is to be used for personal purposes or if it is to be sold.
- Restrictions on Re-Renting: The Landlord may not rent the Real Property to a third party before the lapse of at least two (2) years in case of residential property.
Valid Reasons for Eviction
The basis for an eviction notice to be legally effective must be based on specific permissible reasons, including:
- Selling of the Property: Landlords can evict tenants if they want to sell the property.
- Personal Use: This is when the landlord has to move in or his/her first-degree relatives have to occupy the premises.
- Major Renovations: If the property requires major renovations that cannot be conducted with the tenant in the premises, an eviction notice can be served.
- Demolition or Reconstruction: Eviction is allowed in cases of demolition or reconstruction of the property.
The Role of the RERA Rental Index
The Real Estate Regulatory Agency (RERA) revised the rental index to reflect the going rate in the market. The RERA Rental Index guides increases in rentals, but it does not explicitly address eviction rights. It can still influence a landlord’s decision on adjusting rentals and evicting tenants.
Impact on Tenants Paying Below Index Rates
Some landlords may issue eviction notices to tenants who are paying rent below the rate that appears in the RERA Rental Index. Although the index allows for rent adjustments to reflect market rates, many landlords frequently look to evict their tenants as a means of simply resetting rental agreements to attain the highest possible rental income. While this practice is common in many ways, it does raise a number of legal considerations that must be taken into account by both the landlord and the tenant.
Legal Considerations for Rent Increases
The Dubai rental market regulations indicate that landlords should follow proper legal procedure while increasing rent or giving eviction notices. The maximum annual increase of rents shall be 20%, and any type of increment has to consider several market-related variables. The owner needs to adjust the price according to the local market activity. The owners should comply with RERA regulations by taking the advice of their brokers into consideration.
Market Dynamics and Rent Adjustments
Landlords are keen to increase the rent over and above the percentage indicated by the RERA Rental Index in the most popular areas of the emirate. Legally, these increases should be justifiable and within the parameters set by RERA. Most of the time, landlords hike the rent by considering current market conditions. Therefore, sometimes new tenants have to face a hefty rise. Variables would include location, amenities, and demand in the area, which would determine how much the rents can be increased.
Eviction Notice Procedures
In case of issuing the eviction notice, Dubai Law has set out some procedures that landlords are supposed to follow. These are:
- Formal Notice: Formal written notice must be served on the tenant mentioning the reason for eviction. The notice must be served through a Notary Public or by registered mail.
- Documentation: Any supportive documentation of the eviction notice, like a sale agreement if there is a sale of property or evidence that the property is needed for personal use.
- Legal Channels: Ensuring that the notice is served through the right legal channels to avoid disputes or possible legal challenges.
Tenant Rights and Recourse
Tenants do have rights and means to redress in case they are served with an eviction notice. They may:
- Seek Legal Advice: Consult with attorneys about the rights of individuals and the legality of the eviction notice.
- Challenge Unjust Evictions: If the eviction notice is without legal justification or where proper procedures have not been followed, it will be open to the tenants to challenge the said eviction in a competent court of law.
- Landlord Negotiation: Sometimes, the tenants are given extensions and other facilities by the landlord, especially to those who are long-term tenants without any bad record of rentals.
Ensuring Compliance with RERA Guidelines
Both the landlord and the tenant should, therefore, work within the RERA guidelines to avoid legal suits. This will include:
- Keeping Informed: Be updated about the latest regulations and rental index updates from RERA.
- Following Procedures: Eviction notices and rent increase notices shall be given in accordance with the following procedures.
- Seeking Legal Assistance: Engaging with legal professionals to guide the company through complex situations that may arise and to ensure compliance with all applicable legal requirements.
Conclusion
The Dubai rental market is one such place that requires much awareness about legal rights and obligations to be adhered to by both landlords and tenants. With rising rents and increasing eviction notices, staying updated on the latest regulations and changing trends in the market is critical. Following RERA guidelines and taking legal advice whenever possible will, therefore, be expedient for both parties to handle their rental agreements and avoid any impending disputes.
How HHS Lawyers in Dubai Can Assist
In case you are a landlord or tenant facing issues about eviction notices, increment of rent, or any other property management issue, HHS Lawyers is here to offer its expert legal advice and help. With years of experience in Dubai property laws, our lawyers will help protect your rights. Contact HHS Lawyers in Dubai today to schedule a consultation and further discuss how it can assist with your legal issues pertaining to property matters.
