05/03/2025
For buyers and tenants
Dubai has introduced a new Smart Rental Index that evaluates residential buildings using a star rating system, aiming to enhance transparency and fairness in the rental market.
The Dubai Land Department (DLD) has developed an advanced building classification system that assesses properties based on over 60 criteria, including technical and structural characteristics, quality of finishes, maintenance standards, location, and available services such as cleanliness and parking management. Buildings receive a star rating ranging from one to five stars, reflecting their overall quality and amenities. This rating influences the rental value, with higher-rated buildings commanding higher rents. Landlords seeking to increase their property's rating may need to invest in upgrades or renovations.
Rental adjustments are governed by Decree No. (34) of 2013, which stipulates permissible increase percentages based on the difference between the current rent and the average market rent. For instance, if a property's rent is significantly below the market average, landlords may be allowed to implement increases ranging from 5% to 20%.
Currently, the Smart Rental Index applies exclusively to residential properties, with plans to include commercial units in the future. The index is accessible through the DLD's website, providing stakeholders with up-to-date information to make informed decisions.
The introduction of the Smart Rental Index is expected to contribute to a more transparent and balanced rental market in Dubai, fostering trust among investors, landlords, and tenants. By providing clear and accessible information, the index aims to reduce disputes and promote fair rental practices across the emirate. As Dubai's real estate sector continues to evolve, initiatives like the Smart Rental Index play a crucial role in ensuring the market remains attractive and equitable for all participants.
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