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Dubai: The Real Estate Regulatory Authority (Rera) will develop an electronic system, to register tenancy agreements which will preserve the right of the two contracting parties, according to a statement.
"This step will enhance a stable rent market in Dubai," the Rera statement said.
Three different departments in Dubai are implementing the new rent cap decree ( Decree No. 27 of 2007) issued by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, the statement said.
The decree states that rents will be capped by 5 per cent in 2008.
The Dubai Land Department, the Real Estate Regulatory Authority (Rera), and the Rent Committee at Dubai Municipality will implement the rent cap in 2008.
Rera will register rent contracts starting in 2008 through a developed electronic system, it said.
Sultan Butti Bin Mejren, director-general of Dubai's Land Department said that the establishment set by Shaikh Mohammad last June to organize the property market is handling with 'high efficiency' the rent sector.
"The Land Department is already looking at new regulations to stable rental market. There are several schemes and studies to find solutions to stabilise high rents in 2009.
"The decree reflects Shaikh Mohammad's concern for Dubai's UAE nationals and residents who are facing great difficulties because of rent increases" Marwan Bin Ghalita, chief executive of Rera, said in a statement.
"The decree emphasized that rent contract signed in 2007 to 2008 are not to be increased. Which practically means that no rent increase is allowed before two years passing on any contract," he added.
Shaikh Mohammad had ordered a 15 per cent rent cap in 2006, after which he intervened personally and decreased the cap in 2007 to 7 per cent.
This kind gesture is a welcome move and strengthens the government's earlier position to support the majority of the emirate's population - namely tenants who have been a victim of unreasonable rent hikes in the past few years.
Landlords whose rents are lower than the market value can protest at the rent committee at Dubai's Municipality, said Bin Ghalita.
The chief executive of Rera also said that despite the recentness of this establishment, it has succeeded in setting up a new electronic registry system for new and old rent contracts and for all types of properties, starting from the New Year.
This will assist in finding a rent data base which will make the whole procedure more efficient and transparent.
Bin Galita expressed his confidence that all property companies will abide by the new regulations.
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