Dubai: Tenants in Dubai will have to be notified 'at least' 90 days in advance by the landlord about any rent increase they are planning for a renewed contract. If this is not followed, there can be no increases.

Market sources say there had been instances of 'arbitrary rental hike demands' by some landlords during renewal time - and without giving their tenants lead time on what sort of increases they must expect.

According to brokers, the move by the Dubai Land Department definitely rates as a 'tenant-friendly' move. Tenants get clarity of what they are being asked to pay, and they get that a good three months prior to renewal time.

The Dubai Land Department had introduced a new digital Rental Index at the start of 2025 to provide real-time data of trends in the rental market. And at the same time, bring down disputes between landlords and tenants over sudden and sharp rental hikes.

The new Rental Index is for residential leases only. (Digital rental Index for commercial real estate in Dubai could be introduced at a later date.)

According to the Dubai Land Department, in cases where the landlord provided the required 90-day notice and the 'previous index supported the increase, but the new index does not', then the renewal date will determine which index applies:

* The previous index will be applied if the contract was renewed before 2025.

* The new index will be enforced if the contract is renewed during 2025.

Until 2025, the DLD was operating a rental index system that was updated on a yearly basis. The number of areas that were covered too were limited to in-demand freehold and non-freehold districts.

With the new digital Rental Index, more areas in the city have come under the coverage of the platform.

More than 900,000 residential lease contracts were registered across Dubai in 2024, which is an 8% increase from the year before.

“The Smart Rent Index helps curb inflation and enables stakeholders to make informed investment decisions based on reliable data," said Majid Al Marri, CEO of the Real Estate Registration Sector at Dubai Land Department.

The new hikes are 'based on data drawn from multiple factors', which include the rental contract values in the building, the average rental values in the area, and the building classification, according to the Dubai Land Department.

"A clear framework has been established to manage rent increases, considering the timing of the landlord’s notification to the tenant and the contract renewal date," the statement added.

According to Al Marri, "The Smart Rent Index marks a significant step toward ensuring transparency in rent determination while reinforcing Dubai’s commitment to digital transformation and market fairness."