Under the new rules, all lease agreements processed through the Tawtheeq registration system cannot be finalized with a rent increase compared to the previous year. Even if the parties have agreed in advance on a rent increase, the system will automatically reject such a transaction.
As market representatives note, the measure effectively repeals the previously existing mechanism that allowed landlords to raise rates by up to 5% per year, provided they complied with the notice period. Now, any contract renewal is fixed at the level of the previous rent without exceptions or upward adjustments.
“If a higher price is entered into the system, it simply won’t approve the contract,” the Khaleej Times quotes market participants as saying, emphasizing that the technical restriction makes the rule mandatory.
Experts pay particular attention to the so-called protection of “vacant properties”: even if a tenant leaves a unit, a new lease for the same property cannot be signed at a higher rate than the previous one. This significantly shifts the balance between landlords and tenants and limits the ability to “re-index” a property to market rates.
The measure aims to stabilize housing costs for residents and businesses amid rising demand and limited housing supply in the emirate. However, the duration of the restriction has not yet been determined: authorities state that it remains in effect “until further notice.”
The decision is not retroactive. Contracts registered before the introduction of the new rules are not subject to revision.
