Dubai to launch dedicated rental index for shared housing under new law
No person in Dubai will be allowed to designate a property for shared housing without first obtaining a permit.
Dubai has announced new housing reforms that are aimed at reducing informal rent hikes.
The Dubai Land Department (DLD) has announced a new dedicated rental index for shared housing units.
The new law has been designed to regulate the shared housing segment of the Dubai property market.
The DLD will be tasked with the responsibility of both establishing and periodically updating the index.
LexisNexis Middle East published by Practical Guidance shared comprehensive information on the new shared housing laws.
The guidance issued in the index provided by LexisNexis Middle East will take into account the technical and service specifications of individual shared housing units.
However, it does not specify when the index will be launched, how rents will be calculated or whether rates will be assessed by unit, room, bed space or the area allocated to each resident.
A rental index is not something new to the Dubai housing marketplace, it already has one in place.
That acts as an official benchmark for determining permitted rent increases during tenancy renewals.
However, the new law provides for an index tailored specifically to properties licensed for shared housing.
A number of real estate companies across the city believe the new law can make pricing much more standardised.
In addition to this, they pointed out that the new measures will significantly reduce informal rent-setting practices, and in general, improve efficiency across the board.
It limits the ability of landlords to impose aggressive price hikes in unregulated arrangements.
The DLD will also manage an electronic Shared Housing Register.
Essentially, that register will contain details of approved units, tenancy contracts and residents.
The Shared Housing Register will also be linked to a unified digital permit platform that is operated by Dubai Municipality.
Under the law, no person or entity will be allowed to designate a property for shared housing without first obtaining a permit.
Permits will generally be valid for one year and may be renewed for similar periods – and owners can also request a two-year permit.
The DLD have stressed that renewal applications must be submitted at least 30 days before expiry.
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