Commercial tenants in residential buildings are complaining of increasing pressure from property owners regarding large rent increases upon contract renewals, without adherence to legal regulations or consideration of market conditions. They told 'Emirates Today' that if a tenant refuses the rent increase, they receive an eviction notice under the pretext of selling the property or using it for personal purposes, which puts business owners in a difficult position, threatening the stability of their operations. They pointed out that some owners use the 'eviction for sale' clause as a means to pressure them into accepting unjustified rent hikes, ignoring the allowable increase percentages set by regulatory bodies. They confirmed that these practices negatively impact the continuity of their small and medium-sized projects, making them vulnerable to huge losses due to forced relocation or business closure, in addition to expenses for shop fittings and decor. They called on the relevant authorities to develop plans to standardize lease periods for commercial spaces in residential buildings to ensure the continuity of their projects and to regulate the contractual relationship between the two parties.
In contrast, real estate professionals stated that proposing plans to standardize lease periods for commercial spaces in residential buildings is not feasible, as each property owner has a specific strategy for managing their properties. They emphasized that a property owner cannot evict a commercial tenant unless certain conditions are met. They described these complaints as individual cases that do not represent a general trend in the market, noting that the laws are very clear in this regard and do not allow for any rent increases outside the defined framework.
In detail, commercial tenants in residential buildings outlined the challenges they face, particularly regarding rent increases for their spaces and the subsequent demands for eviction of the leased premises if the rent increase is refused. A commercial tenant in Dubai, who preferred to remain anonymous, said: 'We face increasing pressure from property owners when renewing lease contracts. Often, we are asked to accept significant rent increases without any clear justification or regard for current market conditions.' He added: 'If the tenant refuses these increases, they receive an eviction notice, which puts them in a very difficult position and threatens the stability of their business.' He noted that this pressure makes managing the shop and financial planning more complicated, especially with monthly obligations and rising operational costs.
It is worth noting that an eviction notice must be given at least 12 months in advance according to Law No. (33) of 2008. In turn, tenant (M.S.) said: 'We have noticed that some property owners use eviction under the guise of selling the property or using it for personal purposes as a way to pressure tenants into accepting unjustified increases. These practices completely ignore the legally allowable increase percentages and make us vulnerable to significant risks such as forced relocation or business closure.' He added: 'For owners of small and medium-sized enterprises, this not only affects the financial return but can also lead to huge losses due to the costs of setting up the shop or losing customers.'
In the same context, tenant (A.A.) said: 'In most cases, landlords do not provide us with any real reasons for the increase and do not give us enough time to negotiate. The 'increase or evict' policy has become the norm, which contradicts the spirit of the law, which aims to achieve a fair balance between the landlord and the tenant.' He added: 'We need greater protection and long-term stability for our businesses because any forced relocation or temporary suspension of business activities directly affects our income and investments in the shop.'
Mandatory Reference
In turn, Founder and CEO of 'Al Rawi Real Estate', Ismail Al Hammadi, said: 'There is no doubt that the real estate market in Dubai is free, based on investment and return, but freedom does not mean chaos, and the rental relationship cannot be reduced to the equation 'either increase or evict.' He added: 'What we hear today from some commercial tenants about using eviction under the pretext of sale or personal use as a means of pressure to impose increases that exceed the approved rent index is not just a passing complaint, but a dangerous indicator if not read through the lens of legislation, not emotion.' He confirmed that the law regulating the contractual relationship is clear, and the Dubai Rent Index is not an optional suggestion but a mandatory reference designed to regulate the market and achieve a balance between the owner and the tenant, stressing that any practice that uses legal grounds for eviction outside its real context is not a legitimate right, but constitutes a fraud that threatens trust and commercial stability.
Al Hammadi continued: 'Those who bet on forcing the tenant by threat overlook the most important fact: a good tenant is the highest-quality commercial asset in the building. Losing them means vacancy, loss of income, and turnover of units at a higher cost and with lower results. In the end, real estate does not profit from walls, but from the businesses that live within it.' He confirmed that 'Dubai did not become a world economic capital through a culture of 'imposition,' but through a model governed by law, regulated by logic, and protected by trust between the parties,' noting that the Dubai Rental Dispute Centre has proven to be the most just refuge for resolving any imbalance, without favoritism or diminishment of rights.
Al Hammadi said: 'The deepest message today is not only legal but economic: the sustainability of the market is more important than an immediate increase, and a fair relationship is stronger than a contract imposed by coercion.'
Unlawful Practices
In turn, CEO of 'Standard Real Estate', Abdelkrim Al Mulla, said that some tenants who fall victim to unlawful practices by some property owners often do not know their legal rights and the applicable regulations in the emirate of Dubai. He confirmed that the laws in this aspect are very clear and do not allow for any rent increases outside the defined framework. He explained that an owner cannot increase the rent without referring to the approved Dubai Rent Index from the Dubai Land Department, where the increase, if any, is determined based solely on the legal percentages. In case the index shows no increase, the owner has no right to demand it. He pointed out that the Dubai Rent Law clearly stipulates the cases in which an owner can request eviction, such as the actual demolition of the property, or the owner's or their first-degree relatives' desire to use the property for residential purposes, provided this is proven. However, eviction under the pretext of sale or personal use without actual implementation is a clear violation.
He noted that if it is proven that the owner did not carry out the reason for eviction after the tenant was vacated, such as not demolishing the property or not selling it, the tenant has the right to file a complaint with the Rental Committee and claim compensation or be reinstated to the same property. He confirmed that the regulatory authorities in Dubai, led by the Real Estate Regulatory Agency (RERA), deal seriously with such cases, and penalties can extend to banning the owner from renting the property again for a specified period if the violation is proven. He stressed that the laws in Dubai are fair and clear for both parties, pointing to the importance of both the owner and the tenant being fully aware of their rights and obligations, and that referring to the official laws is the best way to ensure justice and transparency in the rental relationship.
Smart Rent Index Established the Principle of Fairness
Real Estate Manager at 'Al Waleed Real Estate Group', Mohammed Turki, confirmed that 'it is not possible to apply plans to standardize lease periods for commercial spaces in residential buildings, as each property owner has a specific strategy for managing their properties.' He added: 'The law is clear in regulating the contractual relationship between the owner and the tenant and is fair to both parties.' He noted that the complaints related to receiving eviction notices as a means of pressuring tenants to accept rent increases are individual cases and do not represent a general trend in the market.
Turki called on tenants, if they encounter such situations, to resort to the specialized legal channels and open a file at the Dubai Rental Dispute Centre, and not to succumb to individual actions by some owners, confirming that 'the legal system in Dubai is a model to be emulated in achieving justice between all parties.' He noted that the 'Smart Rent Index,' launched by the Dubai Land Department at the beginning of this year, has established the principle of fairness and transparency between owners and tenants, accurately determining the annual increase percentages set in various parts of the emirate, and no owner is allowed to exceed the percentages specified in the index.'
Quotes:
'We face increasing pressure from property owners when renewing lease contracts. Often, we are asked to accept significant rent increases without any clear justification or regard for current market conditions.'
'Some property owners use eviction under the guise of selling the property or using it for personal purposes as a way to pressure tenants into accepting unjustified increases. These practices completely ignore the legally allowable increase percentages and make us vulnerable to significant risks such as forced relocation or business closure.'
'There is no doubt that the real estate market in Dubai is free, based on investment and return, but freedom does not mean chaos, and the rental relationship cannot be reduced to the equation 'either increase or evict.'
