Abu Dhabi authorities have decided to temporarily freeze rents throughout the emirate. The new rule comes into force immediately and completely repeals the previous procedure, which allowed landlords to raise the rate by 5% annually, provided tenants were notified two months in advance. From now on, all contract extensions will be processed without any increase until further notice.
The key feature of the innovation is automatic blocking through the mandatory Tawtheeq contract registration system. Even if the tenant and the property owner agree to an increase, the system will not allow you to add a higher rate to the contract than the previous one. This makes the freeze virtually mandatory for all parties, excluding any "voluntary" surcharges.
Experts paid special attention to the accompanying measure, the so-called protection from eviction. If the landlord evicts the tenant, he does not have the right to rent the same property at a higher market price: the rate remains fixed at the level of the previous agreement. Ben Crompton, Managing Partner at Crompton Partners, called this level of tenant protection "extremely rare in the world" and stressed that such solutions are rare even in global practice.
It is still unclear whether the freeze will apply to contracts that were already extended before the rule was introduced, experts suggest that it is not retroactive and applies only to new extensions. The duration of the freeze has also not been disclosed: the authorities have not yet specified until what moment it will remain in force.
Source: Khaleej Times
