The Dubai Land Department (DLD) has unveiled its new smart rental index, designed to promote fair rental valuations and strengthen confidence among landlords, tenants, and investors. Under this innovative system, landlords of older buildings will need to upgrade their properties to improve their ratings before they can increase rents.
The index applies to all residential areas in Dubai, including freehold and non-freehold zones, and links building classification and ratings directly to rental adjustments. Majid Al Marri, CEO of the Real Estate Registration Sector at DLD, emphasized that the system encourages property owners to modernize their buildings, which not only enhances the quality of life for tenants but also boosts rental values for landlords.
The classification system evaluates buildings based on over 60 criteria, assigning ratings from one to five stars. Higher ratings allow landlords to justify rent increases, ensuring alignment with Dubai’s rental regulations. The new approach replaces the earlier system, which was updated annually, with real-time updates that reflect accurate market conditions.
DLD officials highlighted the importance of balancing the interests of landlords, tenants, and investors. By incorporating criteria like area averages, building conditions, and contract history, the smart rental index ensures a more tailored and equitable approach to rent evaluations.
This initiative aligns with Dubai’s Digital Strategy, leveraging artificial intelligence to create a transparent, conflict-free ecosystem. It aims to reduce landlord-tenant disputes by over 20% while positioning Dubai as a global hub for real estate investment.
Additionally, the DLD introduced the Model Tenant Classification system, which assesses tenants’ creditworthiness through Ejari and a smart app. These advancements underscore Dubai’s commitment to innovation and sustainable growth in the real estate sector.
Key Features of the Smart Rental Index
- Directly links building classifications to rent increases.
- Real-time updates across all Dubai residential areas.
- Promotes transparency and reduces disputes by 20%.
- Enhances property standards and living quality.
This new model reflects Dubai’s goal to attract more investors while maintaining a balanced and fair rental ecosystem for all stakeholders.
