Tuesday, January 02, 2007

A decree with seven percent rent cap for Dubai

With the arrival of 2007, the residents of Dubai got what they wished for. An Annual Rent Cap of Seven Percent has been announced for the current year for the residents of Dubai. The decree was issued by His Highness Sheikh Mohammed bin Rashid Al Maktoum, the Prime Minister and Vice-President of UAE and the Ruler of Dubai.

The decision was good news for the residents, who had feared that the fifteen percent increase in rents would be extended, due to the misleading opinions of certain real estate agents. According to reports, the seven percent rent cap was decided upon by taking into account Decree No2 (1993) and its amendments, due to which a special committee was set up to settle any disputes between the tenants and the landlords and Decree No.14 (2005) which placed a ceiling for any sort of rent increase in Dubai.

As per the new decree, the hikes in rents should not be more than seven percent of the annual rent of the property. This is applicable to all the rent contracts that are to be renewed during the current year, in case there were no rent increments made during 2006 on that particular property. However, the rent contracts that were already subject to rent increase during 2006 will remain unaltered. The Special Judiciary Committee has been assigned the task of settling any disputes that may arise with appropriate measures so that the new decree could be implemented from 1st January 2007.

The residents welcomed the decision and wished for more measures that could stop the exploitation of the market by unscrupulous landlords and real estate agents.

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