Picture for illustrative purposes only. ARCHIVE

Landlords in Dubai must now notify tenants at least 90 days before lease renewal if they intend to increase rent, according to the Dubai Land Department (DLD). Failure to provide timely notice means the rent cannot be increased. This update comes alongside the new Smart Rent Index, launched in January 2025, which aims to provide real-time rental market data and prevent disputes between landlords and tenants over sudden hikes. The Smart Rent Index is currently applicable only to residential properties, with a separate index for commercial real estate expected to launch at a later stage.

How rent increases will be calculated

The new system considers multiple factors when determining rent adjustments, including: • Rental contract values within the same building • Average rental values in the surrounding area • Building classification Additionally, the timing of the lease renewal determines which index will apply: • If the contract was renewed before 2025, the previous index applies. • If the contract is renewed during 2025, the new index will be enforced. According to Majid Al Marri, CEO of the Real Estate Registration Sector at DLD, the Smart Rent Index is a significant step toward market transparency and fairness. “The Smart Rent Index helps curb inflation and enables stakeholders to make informed investment decisions based on reliable data,” he said. Previously, Dubai's rental index covered only select freehold and non-freehold areas. The new Smart Rent Index, however, includes more areas across the city, offering a broader and more accurate reflection of rental trends. The DLD reported that more than 900,000 residential lease contracts were registered in Dubai in 2024, reflecting an 8 percent increase from the previous year. The Smart Rent Index utilizes artificial intelligence to provide standardized rental assessments across all residential areas, including free zones and special development zones. Al Marri emphasized that the digital transformation of the rental market aligns with Dubai’s commitment to fair housing policies and tenant rights. “A clear framework has been established to manage rent increases, considering the timing of the landlord’s notification to the tenant and the contract renewal date,” he added. With Dubai’s real estate sector experiencing continued growth, the Smart Rent Index is expected to stabilize rental prices while ensuring fair negotiations between landlords and tenants. ICA/Expat Media
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