New Rules for Rental Valuation Certificates in Dubai: What You Need to Know

As of April 1st, 2024, significant changes have been introduced regarding rental valuation certificates in Dubai. If you’re a landlord or a tenant, understanding these changes is essential. Here’s a breakdown of the new rules in a simple Q&A format.

What’s the New Rule for Rental Valuation Certificates in Dubai?
Starting April 1st, 2024, rental valuation certificates can only be issued if there is a legal order or a judgment mandating the evaluation of the property. This is a major shift from the previous process.

How Was the Process Done Previously?
Before this update, obtaining a rental valuation certificate was a straightforward administrative process. All that was needed were basic documents, such as property photos and details, and the certificate could be issued without the need for any court involvement.

Why Was This Change Necessary?
The previous system led to discrepancies between rental valuation certificates and the Real Estate Regulatory Agency (RERA) index. The RERA index plays a critical role in determining average rents and the allowable percentage increases. Inconsistent valuation certificates created confusion and led to unfair rent adjustments.

Can You Give an Example of These Discrepancies?
Certainly! For instance, a rental valuation certificate might show a rent that is either much higher or lower than what the RERA index indicates. This could result in unfair rent increases or decreases, causing disputes between landlords and tenants.

What’s the New Requirement for Issuing a Rental Valuation Certificate?
According to the Dubai Land Department, you will now need a legal judgment or court order mandating the evaluation of the property’s rent in order to obtain a rental valuation certificate. This ensures that valuations are grounded in legal decisions.

What Prompted This Change?
This update aligns with the March 2024 revision to the RERA index. The aim is to standardize rental valuations, making them more reliable and consistent with the official RERA figures.

How Does This Impact Determining Average Rent?
Prior to court proceedings, the only recognized tool to determine average rent is the RERA index. This follows the guidelines of Decree 43 of 2013, particularly Article 3, which states that average rents should be determined based on the “Rental Index in the Emirate of Dubai” as approved by the Real Estate Regulatory Agency.

When Can You Obtain a Rental Valuation Certificate Now?
Rental valuation certificates can now only be obtained after a court dispute regarding the rent valuation indicated by the RERA index and any proposed increases.

What’s the Process for Getting a Rental Valuation Certificate Now?

1. File a court case challenging the RERA index’s rental valuation.
2. An expert will be appointed to inspect the property and assess the average similar rent.
3. If the court rules in favor of a re-evaluation, you can then obtain a rental valuation certificate based on that court judgment.

Conclusion
This change in procedure is aimed at bringing more consistency and fairness to Dubai’s rental market. Both landlords and tenants should be aware of these new requirements to ensure proper rental valuations and compliance with legal standards. By understanding the process, you can avoid disputes and ensure a smoother experience with rental valuations in Dubai.