Dubai rent increase rules: the Smart Rental Index did not change the caps

Dubai Land Department's Smart Rental Index, launched on 2 January 2025, replaced the calculator that had set benchmark rents by area and unit type. It did not touch the five percentage bands a landlord can add at renewal. DLD officials said so directly: "the system will not change the percentages." Most coverage of the index states that the calculator changed without saying plainly that the caps themselves did not. This guide sets out that distinction first, then works through the rest of the statutory system it sits inside, drawing on Dubai Land Department's own legal texts and its own current public materials, including a citation error DLD has not corrected as of this writing and an open question about what happens when a tenancy is never registered at all.

What the Smart Rental Index changed, and what it didn't

DLD rates residential buildings individually now, on a one-to-five star scale, using more than 60 criteria that include location, sustainability, security, building age and amenities. The rating attaches to the building itself rather than to an area or unit type. According to DLD's chief executive of real estate registration, a building can only move to a higher star tier through physical renovation, not through an administrative request. Under the previous calculator, every apartment of a given size in a given neighbourhood was measured against the same area-and-unit-type average, regardless of the specific building's condition.

DLD officials stated on the record that the index does not change the rent-increase bands. As reported by The National, officials were directly quoted saying "the system will not change the percentages." The same report separately paraphrased officials as saying increases would continue under the old system, naming that system Decree No 34 of 2013, the same digit transposition documented below regarding DLD's own promotional materials. The correct instrument, per DLD's own Legislation Reference library, is Decree No. 43 of 2013. The five bands are unchanged: 0%, 5%, 10%, 15% and 20%, at the same 10%, 20%, 30% and 40% thresholds.

What changed is the input those percentages are measured against. Under the old system, average rent meant an area-and-unit-type average. Under the Smart Rental Index, it means a building-specific figure derived from that building's star rating. Two identical apartments in the same neighbourhood can now generate different renewal caps if their buildings carry different star ratings, which the old system could not produce.

This conclusion rests on on-the-record DLD statements reported by one outlet, The National, across two articles, rather than on an explicit clause in an amending decree. No amending decree or resolution altering the five bands was located during research for this guide, and no competitor article was found stating the distinction this directly either. It is corroborated, circumstantially, by the fact that DLD's own current promotional materials still cite the original 2013 decree for the rent-increase rule rather than any new instrument, which is consistent with the bands being unchanged. That citation, though, has a separate problem of its own.

The five bands the index left untouched

The core rule sits in Decree No. 43 of 2013, which sets five maximum annual rent-increase bands, applied at lease renewal. The percentage a landlord may add depends on how far the current rent sits below the average rent for comparable property in the same area.

If the rent already sits at or above the area average, none of the five bands apply and the increase is 0%. The further below average a tenant's rent falls, the larger the increase a landlord is permitted to apply at renewal, up to the 20% ceiling.

Decree No. 43 of 2013 does not itself define how the average is calculated. Article 3 of the decree ties the benchmark to the Rent Index of the Emirate of Dubai, maintained by the Real Estate Regulatory Agency (RERA), but leaves the calculation method and update frequency to RERA and DLD implementation. That gap is exactly the piece the Smart Rental Index changed in 2025, not the bands themselves, but the machinery that produces the number they get measured against, as described above.

A citation Dubai Land Department has not corrected on its own site

As of 14 September 2026, DLD's own live materials misstate the legal citation for this rule. The Smart Rental Index announcement pages on both dubailand.gov.ae and the UAE Government Media Office (mediaoffice.ae) state that Dubai applies its rent-increase system "in accordance with Decree No. (34) of 2013." The actual instrument, confirmed against DLD's own Legislation Reference library, is Decree No. (43) of 2013, the same decree discussed above that sets the five bands. The error reads like a simple digit transposition, and it remains uncorrected on both pages as of the check date.

Decree No. (43) of 2013 is cited throughout this article, as it appears correctly numbered in DLD's own Legislation Reference database. A reader who goes looking at DLD's own announcement pages and sees "Decree No. (34) of 2013" is not looking at a different, newer rule. They are looking at a typo in a government press release that has survived, uncorrected, for well over a year.

When an increase can actually happen

Article 13 of Law No. 26 of 2007 permits either party to seek a rent revision only when the lease contract is renewed, not mid-term. If landlord and tenant cannot agree on a renewal rent, a tribunal may extend the contract and set the figure by reference to the average rent of similar property, under criteria RERA proposes. The original 2007 law also imposed a separate waiting period before any revision could be sought at all. The 2008 amending law, Law No. 33 of 2008, removed that bar, leaving contract renewal itself, rather than a fixed calendar interval, as the trigger point for any increase.

Whichever party wants to change a lease term, including the rent, carries a separate notice obligation. Article 14, as amended by Law No. 33 of 2008, requires that party to notify the other in writing no less than ninety (90) days before the contract expires, unless the parties have agreed otherwise. This 90-day notice rule sits in the tenancy law. It is a different instrument from Decree No. 43 of 2013: one governs the timing of an increase, the other governs its size.

Is a rent increase really capped at once a year?

Competing guides commonly state that a Dubai landlord can raise rent only once a year, as if that were a standalone statutory rule. It is not. No provision in Law No. 26 of 2007, its 2008 amendment, or Decree No. 43 of 2013 imposes a freestanding annual cap on rent increases. The once-a-year figure widely repeated online is an inference, built by combining two separate facts: Article 13 restricts any revision to the point of lease renewal, and most Ejari-registered contracts in Dubai run for a one-year term. Put those together and an increase will, in practice, tend to land on something close to an annual cycle for most tenants. That is a practical consequence of contract structure, though, not a codified independent frequency rule. A tenant on a genuine multi-year lease with no interim renewal point would have no earlier occasion for a revision to be sought at all, and that follows from the shape of the contract rather than from a separate law capping frequency.

Buildings without a finalised star rating

Not every building has completed the Smart Rental Index classification process yet. Per The National's reporting in September 2025, DLD treats a building without a finalised star rating as unclassified for Smart Rental Index purposes, and the prior, pre-2025 rent-cap benchmark applies to it as a fallback until classification is completed. An unrated building does not mean an unregulated one. The landlord is not free to set the renewal rent without reference to any benchmark simply because the star rating is still pending.

Can a tenant contest a building's star rating?

No authoritative, DLD-published process appears to exist for a tenant to formally contest or appeal a building's star rating. DLD's Building Classification Survey materials describe an owner-facing option only: requesting a new survey report through the Dubai REST app after renovation or maintenance, with no published tenant-side channel alongside it. That absence is worth stating plainly rather than smoothing over. Some portal-sourced property-advisory commentary suggests a tenant's practical recourse is to challenge the resulting rent figure, rather than the underlying rating, at the Rental Disputes Settlement Centre, and that rating visibility currently sits with the building's owner, which complicates even locating the figure a tenant might want to dispute. Treat that as a reported workaround rather than a documented right of appeal, because no published appeal mechanism was found.

Registration, and what an unregistered tenancy cannot do

Article 4 of Law No. 26 of 2007, as amended by Law No. 33 of 2008, requires every Dubai tenancy contract to be recorded in writing and registered with RERA through Ejari. The law is explicit about the consequence of skipping this step: no dispute or claim relating to a lease contract may be considered by the courts or the Rental Disputes Settlement Centre unless that contract is registered.

Secondary, portal-sourced commentary extends this further, arguing that because an unregistered lease has no dispute forum available, a landlord who raises rent outside Ejari faces no practical enforcement of the rent-increase bands at all. On this reading, the tenant simply has nowhere to bring a challenge. That is a reasonable inference from the registration bar, but it is contested. No primary source examined explicitly states whether an increase made outside Ejari registration is unlawful, void, or unrestricted. The verified fact is narrower than the popular claim. An unregistered lease has no dispute forum. Whether that also settles the increase's validity is not something the primary law addresses either way.

Two different laws feeding the same tribunal

Dubai's Rental Disputes Settlement Centre hears both ordinary rent disputes and jointly-owned-property disputes, and it is easy to assume one law covers both. It does not. Article 6 of Decree No. 26 of 2013 gives the Rental Disputes Settlement Centre exclusive jurisdiction over rent disputes between landlords and tenants of real property in Dubai or its free zones, including related counterclaims and applications for interim relief. A separate instrument, Article 42 of Law No. 6 of 2019, gives the same tribunal exclusive jurisdiction over a different category of case: disputes over rights and obligations under the jointly-owned-property law, such as service-charge and owners'-association disputes.

The distinction is not academic for anyone actually filing a case. A rent-increase dispute rests on Decree No. 26 of 2013, reaching the tribunal through one statutory route. A service-charge dispute against an owners' association rests on Law No. 6 of 2019, Article 42, reaching the same tribunal through an entirely separate statutory route. Citing the wrong instrument in a filing does not change which building the Rental Disputes Settlement Centre sits in, but it does mean citing the wrong legal basis for the claim itself.

Filing a dispute: fees and timeline

The Rental Disputes Center publishes its own fee schedule. A rental lawsuit, covering eviction, renewal, a rent claim, lease termination, or return of premises, is charged at 3.5% of the annual rent or lease value, with a minimum of AED 500 and a maximum of AED 20,000. A purely monetary claim is charged at 3.5% of the amount claimed, capped at AED 15,000. Half of the basic fee is refunded if the parties reach an amicable settlement before judgment.

According to Al Tamimi & Company's published analysis of RDSC practice, the First Instance Committee, made up of one judge sitting with two real-estate or legal experts, typically issues judgment within 30 days of the substantive hearing. Either party may appeal within 15 days, but only where the disputed amount exceeds AED 100,000 or is unquantified. Judgments below that threshold are final, subject to narrow exceptions such as a jurisdictional error or concealment of evidence.

Before you assume a number applies to you

Everything above traces to a specific instrument: Decree No. 43 of 2013 for the five bands, Article 3 of that decree for the average-rent benchmark, Articles 13 and 14 of Law No. 26 of 2007 for renewal timing and the 90-day notice, Article 4 of Law No. 26 of 2007 for registration, and Decree No. 26 of 2013 or Law No. 6 of 2019 depending on which dispute route applies. None of that is complicated once it is unbundled from the number currently misstated on DLD's own promotional pages.