Dubai to contain rent increase by 7 percent
His Highness Shaikh Mohammad bin Rashid Al Maktoum, vice president and prime minster of UAE and ruler of Dubai yesterday announced to set a cap of seven percent on rent increase in Dubai property for the year 2007. This move comes through to downsize the increasing rents, which have been fueling inflation in Emirates.
The rent allowance was based on a consideration of two decrees; Decree no. 2 of 1993 and its modifications that gave a go ahead to establish special committees for settlement of disputes between tenants and landlords, and Decree No. 14 of 2005, where an upper level was set for any rent increase throughout Emirates. In accordance of the new decree, no rent allowance can exceed 7 percent the annual charge of property. This rule would apply to all new rent contracts about to renew in 2007 with a condition that no increment in rent was made on same property in 2006. Article 2 of the new decree states that rent on those properties whose contract has already been signed in 2006 cannot be reviewed or raised in 2007. The decree takes effect from the date of its issue January 1, 2007 and is to appear in official Gazette.
According to a recent survey more than 44 percent of people in Dubai spend half their salaries on house rent each year. The recent move is being hugely applauded by residents all across Dubai as it comes as a boon for many middle-class families.
Asgar Hussain, a resident of Jebel Ali said, “I was personally under a lot of stress after the 15 percent rent cap ended on December 31st. We were expectind sudden and massive jump in rent any time, but this is the best New Year gift the government could have given us. Another resident of Dubai Kundan Singh exclaimed it as being fantastic news for middle class families. On the other side, the landlords were still uncertain about the decision. Officials at rent committee in Dubai municipality claimed they would make sure landlords abruptly follow the decree. An official quoted “we will see to it that they abide by the new decree”.
Dissatisfaction towards the new rule seemed evident amongst landlords like Amir Ahsan Alam who has rented several apartments in Bur Dubai and Deira areas. He expressed his dissatisfaction towards the decision by saying “the 7 percent cap will affect us badly”.
The rent allowance was based on a consideration of two decrees; Decree no. 2 of 1993 and its modifications that gave a go ahead to establish special committees for settlement of disputes between tenants and landlords, and Decree No. 14 of 2005, where an upper level was set for any rent increase throughout Emirates. In accordance of the new decree, no rent allowance can exceed 7 percent the annual charge of property. This rule would apply to all new rent contracts about to renew in 2007 with a condition that no increment in rent was made on same property in 2006. Article 2 of the new decree states that rent on those properties whose contract has already been signed in 2006 cannot be reviewed or raised in 2007. The decree takes effect from the date of its issue January 1, 2007 and is to appear in official Gazette.
According to a recent survey more than 44 percent of people in Dubai spend half their salaries on house rent each year. The recent move is being hugely applauded by residents all across Dubai as it comes as a boon for many middle-class families.
Asgar Hussain, a resident of Jebel Ali said, “I was personally under a lot of stress after the 15 percent rent cap ended on December 31st. We were expectind sudden and massive jump in rent any time, but this is the best New Year gift the government could have given us. Another resident of Dubai Kundan Singh exclaimed it as being fantastic news for middle class families. On the other side, the landlords were still uncertain about the decision. Officials at rent committee in Dubai municipality claimed they would make sure landlords abruptly follow the decree. An official quoted “we will see to it that they abide by the new decree”.
Dissatisfaction towards the new rule seemed evident amongst landlords like Amir Ahsan Alam who has rented several apartments in Bur Dubai and Deira areas. He expressed his dissatisfaction towards the decision by saying “the 7 percent cap will affect us badly”.
posted by Property Reporter at
10:59 PM
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