Abu Dhabi Rent Cap and Extension of Tenancy Contracts in the Emirate of Abu Dhabi

Analysis

The landlord and tenant relationship in the Emirate of Abu Dhabi is governed by Abu Dhabi Law No 20/2006, Concerning the Rent of Places and Regulation of the Landlord and Tenant Relationship in Abu Dhabi (as amended)(“the Landlord and Tenant Law”)The provisions of this law which deal with the rights of the landlord to increase the rent, and the rights of the parties to terminate or extend the lease, have been amended in recent years and it is hoped that this article will clarify the meaning and effect of the recent amendments.

The Rent Cap

The “rent cap” as it is commonly known, is the limit or ceiling applicable to the permitted annual rental increase which can be imposed by a Landlord. In its original form, Article 16 of the Landlord and Tenant Law stated that the rent cap was applicable to contracts of three years or less and that the landlord could only raise the rent once a year by a maximum of 7%. The current provisions of Article 16 dealing with the rent cap read inter alia as follows: