The tenant based his claim on the average rent prevalent in the same area.
RDC obligated a real estate owner to reduce the rent of his commercial property
The Rental Disputes Center, the judicial arm of the Dubai Land Department, has committed a property owner to reduce the rent of his tenant, as rental values in his area of residence have declined.
The lawsuit was brought by a tenant against his landlord wherein the tenant claimed that his rent for the leased commercial property be decreased as the rental values of the similar properties adjacent to his were lower than the rent he was paying to his landlord.
The tenant supported his claim by exhibiting a copy of the findings of the average rent index issued by the rental valuation committee, as well as a notice to the landlord, informing him of tenant’s desire to reduce the rental value, emailed to the landlord 90 days before the end of the lease, in addition to a copy of the lease.
In its verdict upholding the tenant's request to reduce the rent, the RDC Judicial Committee stated that Law No. (26) of 2007, amended by Law (33) of 2008 Regulating the Relationship between Landlords and Tenants in the Emirate of Dubai, stipulated that The Landlord and Tenant must specify the Rent in the Tenancy Contract. Should the parties omit or fail to specify the agreed Rent, the Rent must be the same as that of similar Real Property. Unless otherwise agreed by the parties, if either party to the Tenancy Contract wishes to amend any of its terms in accordance with Article (13) of this Law, that party must notify the other party of same no less than ninety (90) days prior to the date on which the Tenancy Contract expires.
The RDC indicated in the grounds of its ruling that there was a possibility to reduce the rent during the time of the lease owing to a number of criteria, including the average rent of similar real estate property in similar real property markets within the same area, pointing out that the law regulating leasehold relationship set the (Rental Increase Calculator) index of the Dubai Land Department, one of the criteria for increasing or decreasing the property rent.
The RDC emphasized that those who wished to use the criteria could initiate a lawsuit and set out the standard on which they could base their requests to increase or decrease the rent, provided that the approval of such criteria is subject to the discretion of the Judicial Committee which hears the case and that the other party – the landlord or tenant must be notified 90 days prior to lease renewal.
The rent of the shop under dispute has been reduced by AED 32,000 in line with the rental index.