Mastering the RERA Rental Increase Calculator: A Comprehensive Guide

Sunday, 4 August 2024

Rent is often the largest expense for many households, making it crucial for tenants to ensure they are getting the best value for their money. How can you determine if you’re overpaying or underpaying your rent? This is where the RERA Rental Increase Calculator becomes invaluable. Our comprehensive guide provides all the information you need.

For those who may not be familiar, RERA, the Real Estate Regulatory Agency, is a part of the Dubai Land Department (DLD). It plays a vital role in regulating the relationship between landlords and tenants. RERA is the authoritative body for all organizations and individuals involved in Dubai’s real estate sector.

Table of Contents

• Understanding the RERA Rental Increase Calculator
• How to Use Dubai’s RERA Calculator
• When is a Rent Increase Allowed?
• What to Do When Illegal Rent Increases
• RERA Rental Increase Calculator Update
• Information Required by the RERA Rental Calculator
• Frequently asked questions

Understanding the RERA Rental Increase Calculator

The ruler of Dubai, H.H. Sheikh Mohammed bin Rashid Al Maktoum, issued Decree No. 43 of 2013 in December 2013 to limit rental rises and keep the market from outpricing itself. In order to ensure equitable rental practices and stop unlawful rental spikes, this action was taken.

The annual update of the RERA rental index serves as the foundation for the RERA Rental Increase Calculator’s operation. All Dubai rental properties are subject to the index’s recommendations for the full year.

In order to ascertain whether a rental increase is appropriate, landlords and tenants can use this calculator to enter specifics about their property. It guarantees that any rental modifications are compliant with the law.

Before contemplating any rental increases, landlords are advised to utilize the RERA Rental Increase Calculator to make sure they are compliant with the law. Conversely, tenants who get a notification of an increase in rent should make sure it is accurate by consulting the calculator.

How to Use Dubai’s RERA Calculator

The Dubai Land Department (DLD) website or the Dubai REST app both offer the RERA Calculator, which is easy to use in Dubai. The following easy procedures will help you find

Access the Calculator : To utilize the calculator, go to the DLD website and choose the RERA rent calculator option. Alternatively, you can download the Dubai REST app, which also has the calculator.

Choose Your Option : Options like the Ejari Contract Number, Title Deed Number, and categories such staff housing, commercial, industrial, and residential will be shown to you. Choose the option that best describes your circumstances.

Enter Required Information:

Title Deed Number: Enter your current rent, the year of your certificate, and any other pertinent information to see if you qualify for a rental increase.

Ejari Contract Number: To find out the current rent and any prospective increases based on the RERA rental index, enter your contract number.

Residential: Indicate the area, number of bedrooms, property type (villa or apartment), and end date of your lease contract.

Current Rent Information: If you already rent an apartment in Dubai, input your current annual rent. You can leave this field empty if not.

Calculate Rent: Click “Calculate Rent” after filling out the necessary information to get an estimate of the average annual rent based on current market trends.

This easy-to-use tool assists you in staying up to date on conditions in the rental market and in making wise choices regarding Dubai real estate rentals.

When is a Rent Increase Allowed?

Rent increases are only allowed if your property meets the requirements. If this is the case, your landlord has to provide you 90 days’ notice before renewing your lease. You are not forced to accept the rent increase if the landlord does not provide this notice within the requisite 90 days.

What to Do When Illegal Rent Increases

Even with the rental increase calculator and the restrictions in place, some landlords can still try to raise rent unlawfully or above the allowable amount. When a landlord insists on a hike even though the rental calculator says it’s excessive or not allowed, tenants should talk to the landlord about it and use the calculator to back up their position.

RERA Rental Increase Calculator Update

Dubai’s new rent regulation, which goes into effect on March 1, 2024, clearly limits the amount that landlords can raise rent. The increase can only happen once a year at contract renewal and is based on the existing rental value relative to the market value. If a landlord wants to raise the rent, they have to give the renters notice—90 days in advance.

Example:

Suppose you are renting an apartment in Dubai Media City with two bedrooms. Such an apartment typically costs between AED 90,000 and AED 110,000 per year in 2024. Your landlord has the right to raise your rent by up to 20% if you are already paying a rent that is 40% below market value, or between AED 54,000 and AED 66,000.

How to Calculate the Potential Increase:

• Check Current Rent and Contract End Date: Use the RERA rental index calculator by entering your current annual rent and the date of your contract’s expiration.
• Calculate the Increase: The calculator will display the maximum amount that can be added to your rent at the time of lease renewal.

For example, if you currently pay AED 60,000 a year for a two-bedroom flat, the landlord may raise it by up to AED 12,000, making your new annual rent AED 72,000.

Note: Additional expenses like energy, water bills, and housing fees from the Dubai Municipality are not included in these rental values.

You can more accurately predict and control your rental costs if you use the RERA rental index calculator and remain informed.

Information Required by the RERA Rental Calculator

To use the RERA rental calculator, you need to provide the following details:

• Property Type: Specify whether the property is residential, commercial, industrial, or staff accommodation.
• Tenancy Contract Expiry Date: Enter the date when your tenancy contract ends.
• Main Area of the Property: Indicate if the property is located in areas such as Deira, Bur Dubai, elsewhere in Dubai, or if it is a freehold property.
• Property Type: Choose whether the property is an apartment or a villa.
• Area: Select the specific community or subcommunity where the property is located.
• Number of Bedrooms: Provide the number of bedrooms in the property.
• Current Annual Rental Amount: Enter the current annual rent for the property.

However, it’s important to note that the RERA rent calculator does not consider the following factors:

• Age of the building/unit
• Building condition
• Available facilities
• Floor level

The calculator determines if a rental increase is applicable by comparing your property’s rent with the average prices of similar properties in the same area.