Dubai’s real estate market is constantly evolving, and understanding rent hike regulations is crucial for both landlords and tenants. The introduction of the Smart Rental Index by the Dubai Land Department (DLD) has brought clarity to rental price increases, but there’s still a key rule you need to know: the 90-day notice period.

If you’re a tenant or a landlord in Dubai, understanding how the 90-day notice rule works alongside the Smart Rental Index will help you navigate the market more effectively and avoid any surprises when it’s time to renew or adjust your lease.

📊 Want to know more about how rent hikes apply to you? Schedule a consultation with Hamoodash Alameri today to stay informed and make smarter decisions.

What is the 90-Day Notice Rule for Rent Increases in Dubai?

In Dubai, landlords are required to serve tenants with a 90-day notice before applying any rent increase, regardless of whether the property qualifies for a rent hike under the Smart Rental Index. This regulation ensures that tenants are given enough time to make informed decisions, plan their finances, and either accept the new rental terms or seek alternative accommodations.

The notice must be issued at least three months before the expiry of the lease contract. For landlords, this is a legal obligation that must be strictly followed.

How the Dubai Smart Rental Index Determines Rent Hikes

Launched in January 2025, the Smart Rental Index provides a transparent way to calculate rental increases based on real-time market data. Here’s how it works:

• Property Classification: The index takes into account the type of property (e.g., luxury, standard, or older units) and its location within Dubai.
• Comparative Market Data: The index compares your property’s rent against similar properties in the area, ensuring it reflects the market value.
• Artificial Intelligence: AI is used to create a fair, data-driven rental price based on a variety of factors, including market demand and supply dynamics.

The Smart Rental Index ensures that rent hikes are in line with current market conditions, providing more fairness and transparency for both tenants and landlords.

Why the 90-Day Notice Period Matters for Tenants and Landlords

      1 For Tenants:

• Time to Adjust: The 90-day notice rule gives tenants ample time to plan their next move, whether it’s negotiating a new rent, finding a more affordable property, or even preparing for relocation.
• Market Awareness: It helps tenants stay informed and avoid sudden rent hikes that might affect their budget.

      2 For Landlords:

• Legal Compliance: It’s crucial for landlords to follow the 90-day notice period to avoid legal issues or disputes with tenants.
• Ensure Smooth Renewals: Proper notice gives tenants time to review and accept new rental terms, ensuring contract renewals happen smoothly and with less friction.

Key Factors Affecting Rent Increases under the Smart Rental Index

The Smart Rental Index calculates rent increases using several key factors:

1. Building Condition & Age: Older buildings might have different rental rates compared to newly developed properties.
2. Area Rental Trends: The index compares your property to others in the same neighborhood, ensuring rents are competitive with local market conditions.
3. AI-Based Adjustments: The index uses advanced AI technology to ensure fair rental pricing across all property types and districts in Dubai.

How the Smart Rental Index Affects Inflation and Rent Stability in Dubai

Dubai’s rental market has been under pressure from inflation, with rents increasing steadily over the years. The Smart Rental Index aims to mitigate these inflationary effects by setting rental prices at more realistic levels based on current data.

• In 2024, rental prices for apartments in Dubai increased by 16%, and villas saw a rise of 13%. The new index helps stabilize rental prices by ensuring they align with market trends, rather than inflated rates.

The Smart Rental Index is also crucial in managing Dubai’s cost of living by reducing rent-related inflation, which is one of the key components in the city’s inflation basket.

How Tenants and Landlords Should Adapt to Rent Increases

For Tenants:

• Monitor the Index: Stay updated on how the Smart Rental Index affects rents in your area, so you’re prepared for any changes when it’s time to renew.
• Negotiation Tips: Use data from the index to negotiate a fair rent increase, ensuring it’s aligned with the market value.

For Landlords:

• Understand the Index: Familiarize yourself with how the index works to ensure any rent increases you apply are justified and within market standards.
• Be Transparent: Ensure your tenants are aware of the index and its role in determining rent increases.

How to Navigate Rent Changes in Dubai’s Market: Book a Consultation with Hamoodash Alameri

Whether you’re a landlord or tenant, navigating the complexities of rent hikes in Dubai requires expert knowledge of the Smart Rental Index and the 90-day notice rule. Hamoodash Alameri can guide you through the latest market trends and help you understand how these changes affect you.

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