Category: Real Estate

Rent Valuation Certificate

Re-evaluation of Dubai rental property value, by landlords, can be done through the Dubai Land Department. Landlords who believe that the RERA calculator does not accurately reflect the rental value of their Dubai properties can benefit from this service.

In such cases, landlords can request the Land Department to value their specific Dubai property, factoring in the individual features and specifications. 

This service can be accessed through:

• The Dubai Land Department’s official website or,
• Through the Dubai REST app.

Under the Services menu, there is an option to Request Valuation of Property Lease.

Some of the required documents include:

1. Details and photos of the specific property, 
2. As well as a payment of AED 2,000 per unit.

Based on the submitted documents, the Land Department may issue the Rental Valuation Certificate, reflecting the current market value of that property in Dubai. This Certificate then becomes an official reference, which can be used by landlords to raise Dubai rent or in case of dispute. 

The principle of property re-evaluation is based on Dubai Law No. 33 of 2008, regarding Dubai rental laws. And, specifically, Article 9.2, which sets out criteria, such as the “overall economic situation in the Emirate” and the “average rent of similar property” in determining market value of the property. 

This principle is also well settled in the Dubai Rent Dispute Center or RDC, which has consistently authorized landlords to increase rent beyond the RERA calculator, on the basis of the Dubai Rental Valuation Certificate.  

Increasing Rent on Basis of Rental Valuation Certificate

Landlords can increase the rent in Dubai, above the RERA Calculator, in cases where they have obtained a Property Valuation Certificate, issued by the Dubai Land Department.

This Certificate, in turn, can be issued on the basis of Landlord’s proof that the current market value of their Dubai property is above that reflected in the RERA Calculator. 

Notably, in all cases landlords can only increase rent in Dubai, in line with the allowed percentage of rental increase. Which ranges from 5% to a maximum of 20%. As per Dubai Decree No. 43 of 2013 on Dubai Rent Increase, and Article 1, in particular.

Noteworthy, for the landlord to increase rent, using the Property Valuation Certificate, still requires: 1) the proper legal notice and 2) tenant’s approval. 

In the event the tenant does not agree to the new property value, the Landlord must file a case with the Dubai Rental Dispute Center or RDC, to confirm the new rent in Dubai, on the basis of the Property Valuation Certificate.

This principle was re-asserted by RDC recently, in April of 2023. 

•  In that case, the landlord wished to increase rent in Dubai by AED 25,000, from AED 175,000 to AED 200,000, on the basis of the Rental Valuation Certificate.
• This would have been 14.3% increase.
• The RDC allowed for the Dubai rent increase, but limited it to 5% or AED 8,750.00
• This was on the basis that the current Dubai rent of the property was 14% less than the Rental Valuation Certificate, which allows for a maximum of 5% increase.
• In its judgment, RDC relied on: 1) the Dubai Decree No. 43 of 2013 on Dubai Rent Increase, as well as 2) Law No. 33 of 2008, otherwise known as Dubai Rental Law. 

Dubai rent increase limited to a maximum of 20% of the contract value. In other words, the most that the landlord can legally increase your rent by is 20%, from your current rent amount. 

This is irrespective of how much higher, the landlord believes, the current market value of the property may be. 

Importantly, the allowable percentage of rent increase in Dubai depends on the percentage of the increase of the market value of the property. 

Specifically,

• In cases where the market value of the property has increased by no more than 10% from the contract value, then there is NO increase allowed, all together. 
• If the market value of the property has increased between 11% – 20% of the contract value – then the maximum percentage of increase is 5%.
• In cases where the market value is between 21% – 30% above the contract value – the percentage of increase is 10%.
• If the market value of the property is between 31% and 40% over the contract value – the maximum increase is 15%. 
• And, finally, if the market value of the property is more than 40% above the contract value – the maximum percentage of rent increase is 20%. 

This means, in simple terms, that if your contract rent is AED 100,000 and the property is now valued at AED 300,000, or 3 times more – the maximum amount that the landlord can increase your rent by is AED 20,000, to a total of AED 120,000/per year, which is a 20% increase. 

This is in accordance with the Dubai Decree No. 43 of 2013, Determining Rent Increase for Real Property in the Emirate of Dubai.

And Article 1, titled Percentages of Increase, in particular.

To buy property in Dubai or other Emirates – what do you need to know? 

First, identify the reason for buying property in Dubai or other Emirates.
Is it an investment or for your own use?

Next, do you want the property to be ready now?  Or you want to invest for the future?

Then, decide on the Emirate and specific location within it.

Remember, that expats can only own in designated freehold zones.

Review carefully the title deed, to know:

• Who the sellers are;
• Whether the property is mortgaged or paid off;
• And the property specifications, such as size and parking.

Furthermore, it is important to:

• Conduct thorough property inspection.
• And understand whether the property is rented or not. 

Then, come the commercial factors.

• Make sure that you agree on the purchase price ahead of time and that you can afford it.  
• Remember, that there is often a 10% deposit that is held with the agent.  Although it is not required by law.
• Then, identify the amount of the annual service charges.
• In addition, you will also have to pay a 4% registration fee to the government. 
• As well as real estate brokers’ fees. 

Finally, make sure that whoever you are dealing with is either 

1) the property owner or
2) an official representative with the specific Power of Attorney. 

Importantly, all of this information should be clearly documented in the underlying agreements, which you understand.

The transfer of ownership happens at one of the official transfer centers, at the end of which you will receive a new title deed, in your name.