Questions & Answers
How to increase rent to match market prices?
Dear Sir/Madam,
My tenants would like to renew their tenancy contract for another year. However, property rental prices in the area of my property have increased by 30-35% in the last 12 months.
As I am not a wealthy landlord (the property was purchased from my pension funds in order to provide me with an income), is it acceptable for me to increase the rent to align with current market prices when preparing the new contract?
Please note that the RERA index calculator does not appear to reflect current market prices, so I am unsure of the best course of action or what my options are.
For example, if the tenant does not accept the increase, am I entitled to ask them to leave at the end of their contract?
Dear Questioner,
You can not increase as per the market exactly; you have a limit as per the laws.
- If the rent is 10% less than the market value, there can be no increase.
- If the rent is 11-20% lower than the market value, the maximum increase may be up to 5%.
- If the rent is 21-30% lower than the market value, the maximum increase may be up to 10%.
- If the rent is 31-40% lower than the market value, the maximum increase may be up to 15%.
- If the rent is less than 40% of the market value, the maximum increase may be up to 20%.
And of course, you have to send a notice 90 days before the contract ending date with that increase.
Hi,
Pursuant to your query, you can increase the rent for the existing tenant by giving him at least 90 days written notice.
And for the existing tenant, it has to be in accordance with the RERA index.
If the tenant doesn't agree with the rental increase in accordance with the RERA Index, you can file a complaint in RDC and ask him to vacate the premises.
