The legal framework
Residential and commercial tenancies in Dubai are governed by Law No. 26 of 2007, as amended by Law No. 33 of 2008, and administered by the Real Estate Regulatory Agency (RERA), part of the Dubai Land Department (DLD). The rent-increase ceiling itself comes from Decree No. 43 of 2013, which ties the permitted increase to an official rental index.
The index is published by DLD. In recent years it has been delivered as the Smart Rental Index, which classifies buildings and compares rents for similar units in similar buildings and areas. The official calculator on the DLD website and apps is the reference point both landlords and the Rental Dispute Centre use.
How the comparison works
The test is simple arithmetic. Take the average annual rent the index gives for a comparable unit, compare it with the tenant's current annual rent, and express the gap as a percentage of the index average. If the current rent is at or above the average, no increase is allowed. The further below the average it sits, the higher the permitted increase.
Worked example: the index average for a comparable two-bedroom flat is AED 100,000. The current rent is AED 75,000. The gap is AED 25,000, which is 25% below the average. That falls in the 21–30% band, so the maximum increase is 10% of the current rent, or AED 7,500, giving a new rent of no more than AED 82,500.
The Decree 43 bands
Decree No. 43 of 2013 sets the following maximum increases, applied to the current rent. These are the published bands at the time of writing; always confirm them, and the index figure, against the current DLD rental calculator before you issue a notice.
- Current rent no more than 10% below the index average: 0% (no increase).
- 11–20% below the average: up to 5%.
- 21–30% below the average: up to 10%.
- 31–40% below the average: up to 15%.
- More than 40% below the average: up to 20%.
The 90-day notice rule
Under Dubai tenancy law, a party who wants to change the terms of the lease at renewal, including the rent, must notify the other party at least 90 days before the lease expires, unless the parties have agreed otherwise. A landlord who misses the window will generally find it hard to enforce an increase for that renewal, even if the index would have allowed one.
Send the notice in writing through a channel you can prove, state the current rent, the proposed rent and the basis for it, and keep a copy with the date it was delivered.
Document the calculation
If a tenant disputes an increase, you will need to show your working. For each renewal, keep the date you ran the calculation, the index result (ideally a saved copy or screenshot of the DLD calculator output), the unit attributes used, the band applied, the resulting maximum, the rent actually offered, and proof of when the notice was delivered. Offering less than the maximum is always allowed; offering more is not.
PropertyHive's rental increase rules engine applies the Decree 43 bands against the index figure for the unit, enforces the 90-day notice rule, and gives each calculation a plain-language reason that is kept on the audit trail. Renewals are prepared automatically 90 days before expiry, an offer above the legal cap is blocked, and bulk rent reviews run the same check across a portfolio. When the regulator changes the rules, the new rules are entered as a new dated rule period, with no code change.
Abu Dhabi, DIFC and other exceptions
Decree 43 and the DLD index apply in Dubai. Abu Dhabi has its own tenancy framework, administered through the Abu Dhabi Real Estate Centre (ADREC) with leases registered on Tawtheeq, and its rules on rent increases have changed several times, including periods when increases were frozen. Check the current ADREC position for each renewal rather than assuming the Dubai bands apply.
Property in the Dubai International Financial Centre (DIFC) is governed by DIFC's own leasing law, and the RERA index caps do not apply there. Other free zones and special developments may also have their own arrangements, so confirm which regime covers the property before you apply any cap.
In PropertyHive, each jurisdiction profile holds its own dated rule periods. The Abu Dhabi profile tracks the ADREC position by date, including the freeze, and DIFC is excluded from the RERA cap.
