Real Estate
A landlord in Dubai cannot raise the rent on a shop, office or warehouse by whatever the market will bear. The increase is capped by Decree No. 43 of 2013 on the same sliding scale that applies to homes, and it depends on one thing: how far your current rent sits below the average rent for comparable premises. If your rent is already within 10% of that average, the answer is no increase at all. On top of that, a landlord who wants to change the rent at renewal must tell you at least 90 days before the contract expires, unless your contract sets a different period.
MAX Legal Consultancy advises businesses on commercial tenancies in Dubai, including rent reviews, notices and disputes at the Rental Disputes Center. If you have just received a proposed increase, our commercial lease dispute service sets out how we can help.
The Rules Apply to Commercial Property, Not Just Homes
Law No. 26 of 2007, as amended by Law No. 33 of 2008, regulates landlord and tenant relationships in Dubai, and it covers commercial premises as well as residential ones. Decree No. 43 of 2013 then caps how much rent can rise at renewal. RERA's criteria for applying that cap take account of the type of property, so retail, office, industrial and staff accommodation are each assessed against their own comparables rather than against apartments.
The Permitted Increase
The cap works off the gap between what you currently pay and the average rent for a similar property in the same area:
Up to 10% below the average: no increase.
11% to 20% below: up to 5% of the current rent.
21% to 30% below: up to 10%.
31% to 40% below: up to 15%.
More than 40% below: up to 20%.
Two things follow from this that landlords often get wrong. The percentage is applied to your current rent, not to the market average. And nothing in the Decree allows an increase simply because service charges, financing costs or inflation have risen. If the rent already matches the market, the permitted increase is zero regardless of the landlord's own costs.
Which Index Applies to Commercial Premises
This is where commercial tenants are most often misled. The Smart Rental Index that the Dubai Land Department launched on 2 January 2025, which uses a building classification system to value units, covers residential areas. The DLD has said it intends to extend the approach to commercial and industrial sectors.
Separately, the DLD's Rental Index service has its own sections for Commercial, Industrial, Industrial Lands and Staff Accommodation alongside Residential. So a commercial tenant checks the commercial section of the Rental Index for the relevant property type, not the residential Smart Rental Index figure a landlord may have quoted. If a landlord justifies an increase with a residential index number for your area, that is not the right comparison.
The 90-Day Notice Is the Point Most Disputes Turn On
Either side can propose changing the rent, or any other term, at renewal. But the party proposing the change must notify the other at least 90 days before the contract expires, unless the parties agreed on a different period (Articles 13 and 14, as amended). A notice served 30 days out, or raised for the first time in a renewal invoice, does not meet that requirement.
If the 90 days were not given, the contract renews on the existing terms. That single point resolves a large share of commercial rent disputes without any argument about market values at all, which is why the date on the notice is the first thing to check.
If You Do Not Agree to the Increase
You are not obliged to accept a proposed increase. If the two sides cannot agree, the Rental Disputes Center can determine a fair rent. Practical points:
Keep paying the existing rent while the matter is unresolved. Stopping payment converts a rent dispute into an arrears case and hands the landlord a separate ground to act on.
Reply in writing, on the record, and keep proof of delivery.
Check the index yourself for your property type before conceding anything.
Do not let the tenancy lapse while you negotiate.
Why a Lapsed Tenancy Costs a Business More Than the Rent
A commercial tenant has an exposure a residential tenant does not. A mainland trade licence renewal requires a valid Ejari registration for the premises. If the tenancy is allowed to lapse during a dispute, or the registration is not kept current, the licence renewal can stall, and that affects far more than the unit itself. Businesses sometimes accept an unlawful increase for exactly this reason. Resolving the rent question and keeping the registration in order are two separate jobs, and both need to be handled.
A Rent Increase and an Eviction Are Not the Same Thing
A landlord who cannot raise the rent as far as they would like sometimes serves a notice to vacate instead. Those are governed by their own rules: recovering premises for sale, demolition, reconstruction or personal use requires 12 months' notice through a notary public or by registered mail. Our guide to eviction grounds and notice rules in Dubai sets out what a landlord has to establish, and the same framework applies to commercial premises.
How We Help
We check whether the increase is within the Decree No. 43 limits for your property type, whether the notice was valid and served in time, and what your position is if it was not. Where the increase is excessive or the notice defective, we set that out to the landlord in writing, which resolves most matters without a hearing. Where it does not, we prepare and run the case at the Rental Disputes Center.
Talk to MAX Legal Consultancy before you reply to a proposed increase, not after you have signed the renewal. See our commercial lease dispute lawyer in Dubai page, our real estate legal services for other property matters, or our guide to Dubai rental disputes for the wider tenancy framework.
This article is general information about Dubai tenancy law, based on the legislation in force when it was written. It is not legal advice for your specific situation. Official English translations of Dubai legislation state that the Arabic text prevails in case of conflict.
