The “smart indicator” is a guide to new contracts

Emirates Today received inquiries from tenants about how to benefit from the “Smart Rental Index,” which was recently announced by the Dubai Land Department, and which determines the rental value based on the building and not the area.

The department stated that the new index is based on a building classification project, which the department has been working on for a long time, and includes a large number of determinants according to which a building is classified.

Director of the Rental Affairs Department at the Dubai Land Department, Khaled Al Shaibani, said that the new smart rent index is the main tool in determining rent increase rates in old contracts, while it is used as a guiding tool in new contracts governed by the market and by mutual consent between the landlord and the tenant.

To clarify how to benefit from the new smart rent index, we must differentiate between two types of tenants: the new tenant, and the old tenant who has had one rental year and wants to renew his contract.

The old tenant is the focus of the discussion in this report, as the rent index for the new tenant is only indicative, and the rental value is based on satisfaction between the two parties.

As for the old tenant, he must take a number of steps to know the amount of the increase in the rental value of the residential unit in which he lives, through the Dubai Land Department website, or the “Dubai Rest” application, which shows the average rental values ​​in the building.

The percentage increase in the rental value upon renewal of the contract is determined according to the following:

1. Without any increase in the rental value of the real estate unit, if the rental allowance is less than 10% of the average rent in the ideal (residential area).

2. 5% of the rental value of the real estate unit, if the rent is less than the average rent by between 11 and 20%.

3. 10% of the rental value of the real estate unit, if its rent is less than 21 to 30% of the average rent.

4. 15% of the rental value of the real estate unit, if the rent is less than 31-40% of the average rent.

5. 20% of the rental value of the real estate unit if its rent is less than 40% of the average rent.

The index covers all residential areas in Dubai, including main areas, special development areas and free zones, ensuring uniformity of evaluation and pricing standards throughout the emirate. It also gives landlords a reliable tool to evaluate properties and determine rent increases in a transparent and thoughtful manner, while allowing tenants to ensure transparency and protection from unjustified increases, which enhances their confidence in the real estate market.

The new smart rental index greatly helps in evaluating and valuing properties according to these smart criteria in the rental index, which will contribute to evaluating real estate, providing great protection for tenants from exploitation or paying rents higher than estimated.

The Chairman of the Board of Directors of On Plan Real Estate Company, Ahmed Al-Dawla, confirmed that the smart rental index facilitates identifying the property that any citizen or resident in the emirate rents, buys, or lives in.

He explained that this method is by using the “Dubai Rest” application, then choosing the rental index, manually entering the information that the person wants to inquire about, then choosing the area and setting the required rent value or the property to be purchased, after which the data appears on the application with complete transparency and credibility.

For his part, the CEO of Al-Andalus Real Estate Group, Saleh Tabakh, said that the “smart index” is a step that supports competitiveness among developers, by providing attractions, services and better quality so that their projects achieve better investment returns for buyers, and it also gives distinctive properties their right to be distinguished from others. Others, and provide justice to the tenant and freedom of choice, according to the services provided in each project or building.

As for the legal advisor, Youssef Al-Azab, he said that the launch of the smart rental index solves the problems of evaluating rents in the market, and is available to know the rental value of any real estate unit in real time.

. The “index” determines the rental value based on the building, not the area.