UAE Property: ‘Has Rera’s new index reduced house rents in Dubai?’

Question: My rental contract expired in January. I checked the Real Estate Regulatory Agency’s rental calculator in December to understand whether I was due for an increase or not. Back then, it stated that a 10 per cent increase was allowed. After the announcement of the new rental index in January, I checked again, only to be surprised that the index now stated no increase in rent during this renewal. I was glad that I didn't confirm a rental amount with my landlord in December. My question is whether rents are reducing and what would have happened if I had confirmed the 10 per cent increase in December, now that the index states no increase? AH, Dubai Answer: The new rental index was introduced in January this year mainly to improve the accuracy in rental figures for tenancy contract renewals. The previous index was calibrated solely by taking the average rents for specific number of bedroom units in a specific location. The new index is much more sophisticated and now uses artificial intelligence along with data from not just old contracts but new ones, too. In addition, it understands what grade a building has been classified in from one star to five stars within the specific location. When you checked the index in December, it was not yet updated to the new system. That is why when you revisited the index in January, it stated no increase. The reason must be because the building is not rated as high as the previous calculator thought. Rents are not coming down as such (market wise). It's because the algorithm checks the grading of the building and takes into consideration all other factors and assesses accordingly. It is possible for rents to be quoted higher at renewals, especially if a particular unit is in a luxury building that is graded as five stars. In each case, the next renewal rental rate will be exactly what the index states it is and both landlords and tenants should abide by it. If you had agreed to the 10 per cent increase in December, you would still have the right to question the hike, given the new data from the new index. If the landlord didn't agree to reassess, the only alternative would have been to file a case at the rent dispute centre in order to find a solution. Q: I moved out of a rental studio, but the landlord’s agent is refusing to return my security deposit claiming recurring issues he never fully fixed. This will now be taken out of the security deposit. How do I report this to the Dubai Land Department? What are the steps, costs and time frame involved? MD, Dubai A: Disputes regarding the security deposit are very common. However, you should know that the landlord has a duty of care to you to maintain the property in good working condition and to ensure this is administered in a fair manner. It is common practice for tenants to take care of any maintenance issues that cost less than Dh500 ($136) and any amount above this is the landlord’s responsibility. If you cannot find a solution amicably with your current problem, you can file a case at the Rental Dispute Centre. You can do this either online through rdc.gov.ae or alternatively you can visit them directly on the first floor of the Dubai Land Department building in Banyas Street in Deira. There are many people there that will help you with organising the paperwork because it has to be filed in Arabic. The cost is 3.5 per cent of the rental amount or deposit amount, so it is relatively inexpensive and in terms of timing, you should get to a final decision in only a matter of a few weeks. The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to mario@novviproperties.com