Effective January 1, 2025, the Dubai Land Department has launched an updated version of the RERA rental calculator, now called the Smart Rental Index. This new system leverages real-time data and artificial intelligence to calculate rental values with enhanced accuracy and transparency. The regulatory framework under Decree 43 of 2013 continues to govern permissible rent increases, ensuring adherence to capped percentages during market fluctuations.

Key Updates in the Smart Rental Index
 

The Smart Rental Index offers significant improvements over the old system:

Real-Time Updates: Unlike the annual updates of the previous system, rental values are now continuously updated in real time, utilizing AI and diverse data sources.

Key Components: Rental values are determined based on three primary factors:

Historical and current rental contract data from the Ejari system.

Building ratings (ranging from one to five stars), reflecting the quality of facilities and the property itself.

The property's location.
 

Implications for Residential and Commercial Properties
 

Currently, building ratings apply to entire buildings, not individual apartments. However, villas will eventually be rated on a property-specific basis.

The integration of commercial properties into the Smart Rental Index is expected by the second quarter of 2025, broadening the system’s scope.
 

Reader Query:
I rent a three-bedroom apartment in Al Wasl and have lived there since 2009. Despite having facilities like a gym and pool, they have never been operational. The building primarily hosts commercial tenants, and maintenance has significantly declined. My rent increased from Dh100,000 in 2020 to Dh107,000, and now I’ve received notice of a 20% hike to Dh128,400, which exceeds RERA's terms. Management claims the landlord has a certificate from the Land Department permitting this increase. What should I do?

Response:
The new Smart Rental Index now governs rental calculations, offering more precise data than before. Here’s how to navigate your situation:

Legal Rent Increase Cap: Per Decree 43 of 2013, landlords can increase rent by a maximum of 20%, depending on market conditions and the rental index. The 15% figure you mentioned is not accurate.

Building Ratings: The new system incorporates a building rating certificate issued by the Land Department. While you haven’t seen this certificate, the index takes it into account to ensure fairness.

Verify the Smart Rental Index Data:

- Visit the updated Smart Rental Index to confirm if the rent increase aligns with the allowable value.

- If the index still reflects no increase, you have grounds to challenge the proposed hike.

Next Steps:

If you and the landlord cannot reach an agreement, filing a case with the Rental Dispute Centre might be necessary, despite your reservations. Based on your description, your case appears strong due to inconsistencies between the proposed increase and the Smart Index data.

Summary of Key Points:

The Smart Rental Index was launched on January 1, 2025, using AI for real-time rental updates.

Rental calculations now include Ejari data, building ratings, and location.

Building-specific ratings apply to apartments, while property-specific ratings for villas and commercial properties are forthcoming.

The maximum rent increase allowed under Decree 43 of 2013 is 20%.

If disagreements arise, tenants can seek resolution through the Rental Dispute Centre.