Can I increase the rent after buying a commercial office if the Ejari contract is valid until 2029?

Dear Sir/Madam,

Thank you for your inquiry regarding the commercial property purchase and associated tenancy agreement. We understand your situation and would like to provide the following professional advice:

1. Existing Lease Agreement:

The current Ejari contract, valid from 01-06-2019 to 31-05-2029, is legally binding and would transfer to you as the new property owner.

2. Rent Increase Regulations:

UAE commercial lease laws stipulate that rent can only be increased once every three years, with a maximum increase of 20% of the existing rent.

3. Market Value Discrepancy:

The current annual rent (AED 50,000) is significantly below the RERA rental index fair value (AED 150,000), exceeding the 40% threshold for maximum allowable increase.

4. Tenant Rights:

The tenant has the legal right to continue the lease under the existing terms until the contract expires in 2029.

Given these circumstances, we recommend considering the following options:

1. Negotiate with the tenant for a mutually agreeable rent increase.

2. Apply the maximum allowable 20% increase every three years, subject to proper notice and compliance with local regulations.

3. Honor the existing contract until its expiration if the tenant is unwilling to negotiate.

Before proceeding with the purchase or any rent increase attempts, we strongly advise consulting with a qualified local real estate lawyer to fully understand your rights and options under current UAE law.

Should you require any further clarification or assistance, please do not hesitate to contact us.

Yours sincerely,

Hello,

In accordance with Dubai’s rental laws, a landlord cannot unilaterally increase the rent during the validity of a fixed-term lease agreement.

Since the current Ejari contract is valid until 31-05-2029, the rental amount remains binding unless the lease terms allow for periodic rent adjustments, which is rare in long-term commercial agreements.

As per Law No. (26) of 2007, as amended by Law No. (33) of 2008, a landlord can only propose a rent increase upon lease renewal, provided that a 90-day written notice is given to the tenant before the contract expiry.

Article 14 of Law No. (33) of 2008 explicitly states:

"If the landlord and tenant wish to amend any of the lease contract terms, either party must notify the other at least ninety (90) days before the contract expires, unless otherwise agreed."

In your case, since the lease remains valid until 31-05-2029, you will only be able to request a rent increase before the expiry date by serving a notice no later than 01-03-2029. The increase must also comply with RERA’s rental index and applicable regulations at the time of renewal.

If you wish to adjust the rent before 2029, you would need to negotiate directly with the tenant for a mutual amendment to the contract.

However, if the tenant refuses, you must honour the existing lease terms until expiration. If you need legal assistance in reviewing the contract or negotiating terms, feel free to contact me via phone or email at [------------] for professional legal support.

Dear Questioner,

Thank you for reaching out regarding the rent increase for the commercial office you are purchasing.

As per the current lease agreement, the tenant is bound by the contract which expires on 31-05-2029, and since the contract is valid for this period, the rent cannot be adjusted until the lease term expires, unless the lease includes a specific clause that allows for such changes.

The fact that the current rent is significantly below market value (50,000 AED vs. 150,000 AED, as per the RERA rental index) is understood, but you are legally bound by the existing lease terms until its expiration.

Regarding your ownership of the property, upon purchasing the office, you would inherit the current lease agreement, and any changes to the rental amount during the term of the lease will require mutual agreement between you and the tenant.

Unless the tenant agrees to a rent adjustment, you cannot legally increase the rent during the lease period.

Here are the options available to you:

- Renegotiate the rent with the tenant:

You can open a discussion with the tenant about adjusting the rent, but both parties must agree, and it must be documented as an addendum to the original contract.

- End the lease upon expiration:

When the lease expires on 31-05-2029, you have the option to renegotiate the rent in line with the market value (RERA’s fair rental index) at that time, or choose not to renew the lease under the same terms.

- Eviction:

If the tenant does not agree to a renewal at the new rent, you may choose not to renew the lease, subject to proper legal procedures under UAE tenancy laws.

In summary, as the new owner, you are required to honor the existing lease until it expires. Once that happens, you will have the opportunity to negotiate the rent according to market conditions.

I hope this clarifies your position. If you need further assistance or would like to discuss this matter in more detail, feel free to reach out.

Best regards,

Mohammed Salah

Legal Consultant

While the Ejari contract is valid until 31-05-2029, there are still ways you might be able to increase the rent before then, even if the contract is for a fixed term.

Some contracts might have provisions for increases based on market value or other factors. The RERA rental index is a valuable tool to support your case for a rent increase, as it provides data on the average rent for comparable properties in the area.

If you need further clarification, kindly share your WhatsApp number, and we will discuss the possibilities.

If you purchase the commercial office, you will inherit the existing lease agreement, meaning the current contract terms (valid until 31-05-2029) will remain binding on you as the new owner.

However, you may request a rent increase under Dubai Rental Law, but only if both parties agree. Otherwise, the contract stands until expiry unless there are breach of terms or mutual renegotiation.

Key Points:

- Rent Increase: You cannot unilaterally increase rent during a valid fixed-term contract unless the tenant agrees.

- Renegotiation: You may negotiate an amendment to the contract, offering incentives or highlighting market rates, but the tenant is not obligated to accept.

- Early Termination: Early termination or eviction would typically require mutual consent or a valid legal reason, subject to RDC approval.

We can assist with lease reviews, negotiations, or legal actions if necessary.

Kindly contact us for further assistance.

Best regards,

Greetings of the day,

Since the lease is valid until 31-05-2029, you generally cannot unilaterally increase the rent unless the contract allows for adjustments or renegotiation.

You may review the contract terms for any clauses related to rent increases or mutual renegotiation.

Otherwise, you will have to wait until the contract expires or negotiate an early agreement with the tenant. Hiring a legal expert on rental laws will help you.

Best Regards,

Sara Al Saedi Advocates and Legal Consultants

Wishing you a pleasant day ahead,

Since the existing Ejari contract is valid until 31-05-2029, the rent cannot be unilaterally increased unless there is a clause allowing for adjustments.

You may review the contract for any provisions related to rent escalation or renegotiation. If no such clause exists, you will need to wait until the contract expires or negotiate an early rent adjustment with the tenant.

Thank you for reaching out regarding your commercial office purchase in the UAE!

Since the existing Ejari contract is valid until 31-05-2029, the tenant is legally entitled to continue the lease under the agreed terms unless the contract allows for rent revisions.

However, in cases where the contract does not include a rent escalation clause, the landlord is generally bound by the existing terms until expiry.

The only way to increase the rent before the contract ends would be through mutual agreement with the tenant. If the tenant refuses, the rent remains unchanged until the lease term expires.

There may be legal strategies to explore, depending on the contract terms and market conditions. I can review the lease agreement and advise on the best approach to maximize your rental return while ensuring compliance with UAE tenancy laws.

Please reach out to me via WhatsApp or phone at [------------] to discuss your case further.

Best regards,

Suhail Rana

A 90-day legal notice must be sent to the tenant to inform him of the rent increase according to the RERA index.

If you have any other inquiries, contact us on phone number [------------].