Key takeaways
- Tenancies in Dubai are governed by Law No. 26 of 2007 as amended by Law No. 33 of 2008, and contracts must be registered in Ejari.
- Dubai law does not recognise key money as a tenant's right; money paid as goodwill is a commercial deal and creates no legal right to stay.
- Rent increases on renewal follow the RERA rental index, with a maximum of 20%, and must be notified in writing 90 days before the contract ends.
- After the contract ends, a landlord can evict only for specific reasons and with 12 months' notice through a notary public or registered mail.
What is goodwill in Dubai?
In some countries, key money is a statutory tenant right. Dubai's tenancy law has no equivalent. What the market calls goodwill is usually an amount the new tenant pays the outgoing tenant for fit-out, equipment, customers and location.
That payment does not transfer the lease by itself. Assigning or subletting requires the landlord's written consent, and the landlord can sign a new contract on new terms. Before paying goodwill, get the landlord's consent and the remaining lease term in writing.
Registering the lease in Ejari
- All tenancy contracts in Dubai must be registered in Ejari, the system of the Real Estate Regulatory Agency (RERA).
- Without Ejari registration, the Rental Dispute Center will usually not hear a claim.
- A valid Ejari is needed to obtain or renew a trade licence and to connect water and electricity (DEWA).
- Renewals and amendments must also be registered in Ejari.
Rent increases on renewal
A landlord can raise the rent only at renewal and according to the RERA rental index calculator. The further the current rent is below the area average, the higher the allowed increase, up to 20%.
| Current rent vs. area average | Maximum increase |
|---|---|
| Up to 10% below | No increase |
| 11–20% below | 5% |
| 21–30% below | 10% |
| 31–40% below | 15% |
| More than 40% below | 20% |
Any change to the contract terms, including a rent increase, must be notified in writing at least 90 days before the contract ends.
Evicting a commercial tenant
- During the contract term, eviction is possible only for limited legal reasons, such as unpaid rent 30 days after notice, unauthorised subletting or illegal use of the property.
- After the contract ends, the landlord needs a legal reason (such as own use, sale, demolition or major renovation) and must give at least 12 months' notice through a notary public or registered mail.
- Verbal or text-message eviction notices have no legal effect.
Resolving rent disputes in Dubai
- 1Negotiate and try to reach a written settlement with the landlord.
- 2File the case with the Dubai Land Department's Rental Dispute Center (RDC), online or at an approved centre.
- 3Pay the filing fee (a percentage of the annual rent, with a minimum and maximum).
- 4Attend conciliation; if no settlement is reached, the case goes to the first-instance tribunal, with a right of appeal.
- 5Enforce the judgment through the Center's execution section.
Frequently asked questions
Does key money exist in Dubai?
Not as a legal right. Dubai tenancy law has no key money right; goodwill is a commercial agreement, and the lease does not transfer without the landlord's consent.
What is Ejari and is it mandatory?
It is Dubai's tenancy registration system, and registration is mandatory; it is needed for a trade licence, utilities and filing disputes.
How much can a landlord increase the rent?
According to the RERA rental index, up to 20%, only at renewal and with written notice 90 days before the contract ends.
What notice does a landlord need to evict a shop?
After the contract ends and for a legal reason, 12 months' notice through a notary public or registered mail.
Where are rent disputes heard in Dubai?
At the Dubai Land Department's Rental Dispute Center.
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