The Dubai government has capped the annual rent increase at a maximum of seven per cent on all rental properties as of January 1.

His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, issued a decree yesterday saying the rent increase will not exceed seven per cent of the annual rent of the property, WAM reported.

Dubai was the first emirate in the UAE to introduce a rent cap in November 2005, when Shaikh Mohammad issued a decree capping the increase at a maximum 15 per cent of the annual rent. That decree ended on December 31.

According to the new decree, the rent increase must not exceed seven per cent of the annual rent of the property. This applies to all rent contracts that are to be renewed in 2007 on the condition that no rent increase was made on that particular property during 2006.

Article 2 of the new decree says no rent increase can also be made in 2007 on properties whose contracts had already been signed in 2006 with a new tenant.

The decree tasked the special judiciary committee in charge of settling disputes between landlords and tenants (Dubai Rent Committee) to come up with appropriate measures to implement the new decree, which takes effect from the date of its issuance, January 1.

Residents, realtors happy

Residents yesterday welcomed the cap, saying it will provide much-needed relief. They said it has come at the right time when rents were spiralling, forcing many expatriates to send their families home. Mohammad Kazerouni, an Iranian, said: "The 7 per cent rent cap will help many to save."

Real estate agents also welcomed the new rule, saying rent increases were not commensurate with employee salaries. Ryan Mahoney, managing director of Better Homes, a Dubai-based real estate company, said the rent cap would be good for the emirate.

"Dubai needs this kind of short-term surgical approach to the rental-control problem," he said.

"Any more than the rents are now is too much. People can't afford to accommodate themselves, and businesses can't afford to accommodate themselves," he added.

With additional inputs from Scott Shuey, Chief Business Reporter, and Sunita Menon and Daniel Bardsley, Staff Reporters

How and where to get help

Tenants and landlords can contact the Dubai Rent Committee in case of disputes relating to rents. Mohammad Ahmad Al Shaikh, General Secretary of the Committee, said the rent committee takes action on rent increase issues only if a tenant formally files a complaint with the rent committee. "We cannot, however, do anything if both landlords and tenants agree on the rent increase," he said.

He advised tenants not to hesitate to come to the rent committee because it was formed to settle disputes between landlords and tenants.

The rent committee's telephone numbers are: 04-2232766, 04-2215555. Its office is located on the ground floor of the Dubai Municipality headquarters on Baniyas Road in Deira.

"They should not hesitate to come to us as their rights are well protected under the law," he said. The committee also receives complaints from landlords against their tenants over rent disputes and other related issues.
published by Gulf News