H.H. Sheikh Mohammed Bin Rashid Al Maktoum, Ruler of Dubai, issued Decree No. 2 of 2011 Regarding Rentals in the Emirate of Dubai on 10 January 2011 (the ‘Rent Cap Decree’). The Rent Cap Decree defines the maximum rent increase for properties leased in the Emirate of Dubai during 2011 and is applicable to all types of property. The Rent Cap Decree has left the rent cap parameters unchanged from 2009 and 2010.
The Rent Cap Decree provides:
1. There should not be any rent increase if the rent for the property is up to 25% below the average similar rent.
2. If the rent value is 26% to 35% less than the average similar rent, the maximum rent increase shall be equal to 5% of such value.
3. If the rent value is 36% to 45% less than the average similar rent, the maximum rent increase shall be equal to 10% of such value.
4. If the rent value is 46% to 55% less than the average similar rent, the maximum rent increase shall be equal to 15% of such value.
5. If the rent value is less than 55% of the average similar rent, the maximum rent increase shall be equal to 20% of such value.
For the purpose of the Rent Cap Decree, the similar rent value of the property is to be calculated with reference to “The Rent Index of the Emirate of Dubai” approved by RERA.