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A tenancy contract in Dubai is valid for one year and can be renewed for another year. However, it does not terminate automatically. It renews on the same terms until the tenant or the landlord agrees to change the terms or end it. Either way, a 90 days notice must be given unless otherwise agreed by both parties.
If the tenant opts to renew the tenancy contract and the landlord wants to increase the rent, a 90-day notice is mandatory for the rent increase. Under Dubai tenancy laws, the landlord can increase the rent of the property after one year. The increase must be compliant with the guidelines set by Dubai Land Department (DLD)’s Rental Index. If the increase is higher than the market average for the type of unit in the area, the tenant can contest the increase.
Once both parties agree on the rental amount and payment structure, they can renew the tenancy contract for another year.
PROPERTY RENEWAL COSTS
The following are the fees that come with the renewal of a tenancy contract.
EJARI RENEWAL FEES
Ejari registration has to be renewed. If you renew the Ejari registration through the REST application, the cost is AED 155. If you opt to get it done through the Real Estate Services Trustees Centres, it is AED 219.75.
HOUSING FEES
A housing fee, which is 5% of the annual rent, has to be paid to the Dubai Municipality. This cost is paid in 12 payments and is added to the tenant’s Dubai Electricity and Water Authority (DEWA) bills every month.
MAINTENANCE FEES/ SERVICE FEES
These are charged by developers like Emaar, Nakheel, and Dubai Properties every year.
ADMINISTRATION FEES
If the landlord and tenant have involved an agency in drafting and renewing the tenancy contract, an admin fee may be charged. However, the broker or agent cannot charge any brokerage fee, maintenance fee, or any additional charge.
