Q: My landlord wants to deduct 3% from the annual rent for contract renewal. Is this legal if it was mentioned in the contract? A: The enforceability of such a clause depends on local rental laws and regulations, which may provide tenant protections against unfair terms. Such fees are contested…

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Can my landlord legally charge a 3% renewal fee if it's in the contract?

Hello,

My landlord wants to deduct 3% from the annual rent for contract renewal.

The first contract, signed a year ago, included a clause stating that I must pay 3% to renew the lease for the following year.

Is this legal if it was mentioned in the contract?

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Mohamed Ahmed Alhadrami

Future Vision Advocates Legal Consultancy

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3 Mar 2025, 17:45

Dear Sir/Madam,

Thank you for reaching out!

If your lease agreement explicitly includes a clause requiring a 3% payment for renewal, it is generally considered legally binding.

However, the enforceability of such a clause depends on local rental laws and regulations, which may provide tenant protections against unfair terms.

To assess your specific situation and explore potential legal options, we recommend booking a consultation with our legal team. You can schedule an appointment or contact us directly through our website.

Best regards,

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Suhail Rana

Ibrahim Al Banna Advocates & Legal Consultants

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3 Mar 2025, 18:53

Thank you for reaching out!

If your lease contract explicitly includes a clause requiring a 3% renewal fee, it generally becomes a binding term unless it contradicts UAE rental laws.

However, landlords cannot impose arbitrary charges beyond what is permitted under Dubai Rental Law (Law No. 26 of 2007 and its amendments).

The Dubai Land Department and RERA regulate rent increases and additional charges, and such clauses may be challengeable if deemed unfair or not in line with regulations.

I can review your lease agreement and advise on whether this clause is legally enforceable. If needed, I can assist you in filing a complaint with RERA (Dubai Rental Dispute Center) to contest this charge.

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

Best regards,

Suhail Rana

4 Mar 2025, 06:37

The situation is as follows:

The rental administrator (broker), acting as an intermediary between me and the landlord, presented a contract containing a clause that requires a 3% renewal fee to renew the contract for the next year.

Additionally, they intended to increase the rent by 12% according to RERA regulations, notifying me only two months before the contract’s expiration.

I refused this increase because they are required to provide a 90-day notice. Since they failed to do so, they are now attempting to charge me the 3% renewal fee.

However, as this clause was included in last year’s contract, they claim it is legal.

Furthermore, the landlord refuses to pay for maintenance costs amounting to 1,300 AED. There are many problems.

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Abdul Wahied Mohammad Sharief

Dar Al Haqooq Legal Consultancy

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4 Mar 2025, 02:46

Dear Valued Client,

Thank you for reaching out regarding the 3% renewal fee stipulated in your rental contract. I appreciate you sharing this important concern.

Regarding the legality of such a clause:

1. Contract Terms: While the clause was included in your initial agreement, its enforceability may be subject to local tenancy laws.

2. Legal Considerations: In some emirates, such fees are contested as potentially violating tenant protection regulations. However, explicit agreement in the original contract could influence its validity.

3. Local Regulations: Sharjah's tenancy laws may differ from other emirates, potentially affecting the permissibility of such clauses.

4. Recommended Actions:

a. Review Sharjah's current tenancy regulations to understand your rights as a tenant.

b. Consider negotiating with your landlord to waive or reduce the fee, citing its uncommon nature.

c. If needed, seek clarification from the Sharjah Municipality or Rental Dispute Committee.

d. Consult a legal professional specializing in Sharjah's rental laws for personalized advice.

We offer expert legal services in tenancy matters and would be pleased to provide further assistance. Please feel free to contact us for a detailed consultation.

Best regards,

ABDUL WAHIED

4 Mar 2025, 06:38

The situation is as follows:

Additionally, they intended to increase the rent by 12% according to RERA regulations, notifying me only two months before the contract’s expiration.

I refused this increase because they are required to provide a 90-day notice. Since they failed to do so, they are now attempting to charge me the 3% renewal fee.

However, as this clause was included in last year’s contract, they claim it is legal.

Furthermore, the landlord refuses to pay for maintenance costs amounting to 1,300 AED. There are many problems.

4 Mar 2025, 06:47

Thank you for detailing your rental situation in Dubai. Please note:

1. The 3% renewal fee is not legally enforceable, regardless of its inclusion in the previous contract.

2. The 12% rent increase is invalid due to insufficient notice (90 days required).

3. Maintenance cost responsibility depends on your original contract terms.

4. For proper renewal, both parties should sign a new agreement and register with Ejari.

5. If issues persist, consider filing a complaint with the Rental Dispute Center.

Remember, contract clauses violating Dubai's rental laws are unenforceable. We recommend discussing these points with your rental administrator and landlord to reach a fair resolution.

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Khaled Ebid

KHE Legal Consultancy

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4 Mar 2025, 05:49

Dear questioner,

It is not legal. However, if you have concerns, you can file a complaint on the RDC portal.

If you need further assistance, kindly share your WhatsApp number.

4 Mar 2025, 06:38

The situation is as follows:

Additionally, they intended to increase the rent by 12% according to RERA regulations, notifying me only two months before the contract’s expiration.

I refused this increase because they are required to provide a 90-day notice. Since they failed to do so, they are now attempting to charge me the 3% renewal fee.

However, as this clause was included in last year’s contract, they claim it is legal.

Furthermore, the landlord refuses to pay for maintenance costs amounting to 1,300 AED. There are many problems.

4 Mar 2025, 06:46

Generally, the tenant is only required to bear the utility charges; the rest of the amounts shall be taken by the landlord unless agreed otherwise.

Kindly share your WhatsApp number to discuss this further.

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Mohammad Salah Shoaib

Al Fahad Legal Consulting

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4 Mar 2025, 06:03

Dear Questioner,

Thank you for reaching out with your inquiry regarding the 3% rent increase clause in your lease renewal contract.

If the lease agreement you signed a year ago includes a provision stating that the rent will increase by 3% upon renewal, this is generally considered legal under UAE law, as long as the clause is in line with the provisions of the UAE Rental Law and the current market conditions.

1. Key Points:

- Contractual Validity:

As the 3% increase was specified in the original lease agreement, and both parties have agreed to these terms, it is legally binding unless there are any unusual circumstances or conflicts with current rental law.

- Rent Increase Regulations:

While landlords are permitted to increase rents, there are limits based on the prevailing market conditions, as per the Dubai Rent Cap Law.

If your rent is below the market value, the increase may be valid. However, if it is already higher than the market rate, the law may impose restrictions on the amount of increase.

2. Action Steps:

You may want to verify the current market rental index to ensure that the rent increase is within the permissible limit.

If the rent is above the market rate, there may be grounds to challenge the 3% increase.

In conclusion, unless the rent exceeds market rates or violates rent control regulations, the landlord’s request for a 3% increase, as specified in the contract, is likely legal. However, I would recommend checking the current market rates or consulting further if you believe the rent is not in line with the market value.

Please let me know if you would like further assistance or if you have any other concerns regarding this matter.

Best regards,

Mohammed Salah

Legal Consultant

4 Mar 2025, 06:39

The situation is as follows:

Additionally, they intended to increase the rent by 12% according to RERA regulations, notifying me only two months before the contract’s expiration.

I refused this increase because they are required to provide a 90-day notice. Since they failed to do so, they are now attempting to charge me the 3% renewal fee.

However, as this clause was included in last year’s contract, they claim it is legal.

4 Mar 2025, 06:39

Furthermore, the landlord refuses to pay for maintenance costs amounting to 1,300 AED. There are many problems.

4 Mar 2025, 07:46

Based on your situation, here’s my advice:

- 3% Renewal Fee:

If the clause was part of the previous contract, it could be legally enforceable. However, you can negotiate or challenge it, especially if it's excessive or unclear in its application.

- 12% Rent Increase:

The landlord failed to provide the required 90-day notice under RERA regulations. Since the notice period was only 2 months, you have the right to reject the increase.

- Maintenance Costs:

Maintenance is typically the landlord’s responsibility unless the lease specifies otherwise. If they are refusing to pay, you can challenge this based on the terms of your lease agreement.

Next Steps:

- Dispute the rent increase due to the insufficient notice.

- Negotiate or challenge the 3% renewal fee.

- Request the landlord cover the maintenance costs as per your lease terms, or seek legal action if needed.

Let me know if you need help drafting letters or taking further legal steps.

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Rashid Obaid

Rashid Khalil Obaid Advocates and Legal Consultancy

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4 Mar 2025, 07:19

While a contract is a legally binding document, it doesn't automatically validate every clause within it. Certain clauses can be deemed unenforceable if they contradict prevailing laws.

In Dubai, specifically, the Dubai Land Department (DLD) and its Rental Dispute Center (RDC) have made it clear that landlords are generally prohibited from charging renewal fees.

You may try to negotiate with your landlord regarding this fee.

If you need further assistance, kindly share your WhatsApp number.

4 Mar 2025, 07:29

The situation is as follows:

Additionally, they intended to increase the rent by 12% according to RERA regulations, notifying me only two months before the contract’s expiration.

I refused this increase because they are required to provide a 90-day notice. Since they failed to do so, they are now attempting to charge me the 3% renewal fee.

However, as this clause was included in last year’s contract, they claim it is legal.

Furthermore, the landlord refuses to pay for maintenance costs amounting to 1,300 AED.

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