Abu Dhabi rent freeze: The implications of this ‘very rare’ policy on you

The Tawtheeq system will not allow registration of contracts at rates higher than those of the previous year, regardless of whether tenants had already signed contracts with increased rates prior to the implementation of this rule.

The real estate community has welcomed Abu Dhabi’s decision to temporarily freeze rent increases, with one industry veteran describing the move as “extremely rare”.

The decision is effective immediately and overrules the previous system under which landlords were permitted to increase rental payments by up to 5% annually, provided tenants were given a two-month notice period. Under the new policy, all tenancy agreement renewals will be processed without any rent increment until further notice.

Managing Partner of Crompton Partners, Ben Crompton, speaking to Khaleej Times, said that although the freeze provides temporary relief, the most important aspect is the “vacancy protection” clause attached to it.

“The landlord cannot increase the rent because he will not be able to rent the property for more than what the tenant is currently paying after evicting them,” he explained. “Usually, it was a flexible rent arrangement that allowed landlords to rent the property at whatever the prevailing market rate was. This has now been frozen.”

According to him, such protection for tenants is “rare in the world”.

The Chief Executive of Springfield Properties, Farooq Syed, explained that the measure would ensure greater certainty for both residents and companies considering development in the emirate.

“It means that for many of our occupiers, we’re giving them more certainty regarding their occupancy costs,” he stated.

“Affordability and certainty measures are crucial factors in strengthening confidence within the market and enhancing the attractiveness of the emirate as a place to live and work,” he added.

Automatic blockage

According to Ben, the Tawtheeq system — through which all tenancy contracts are registered — automatically blocks the registration of contracts with rental prices higher than those of the previous year, even if the landlord and tenant had agreed to an increase before the regulation was introduced.

“You cannot input a higher rental amount than what was previously entered when registering the new rent in the Tawtheeq system,” he said.

“Even when a tenant and landlord agree to a 5% increase in rent, the system will not allow it.”

According to Farooq, there have so far been no indications regarding retrospective adjustments or rebates for contracts that had already been renewed.

“From the looks of it, this appears to apply specifically to tenancy agreements being processed under the new system,” he stated.

“All in all, the reaction has been quite favourable, with both landlords and tenants interested in understanding how the system works,” he added.

A massive relief

This unique action taken by Abu Dhabi to control rents comes as a major relief for residents, according to Ben.

“In the past, rents were capped at 5%, which was last implemented in 2018, and that really benefited everyone,” he said.

“It will make a significant difference for many people who are struggling in the current economy because of the freeze on rents.”

He also noted that there is currently no indication of how long the rental freeze will remain in place.

According to Farooq, such measures — which provide “temporary relief and increased certainty to residents” — have often contributed to strengthening confidence and maintaining market stability, particularly during periods of heightened uncertainty.

He added that the move demonstrates a clear people-centric approach.

“Abu Dhabi has always demonstrated a long-term strategy for urban development that balances economic growth with the needs of residents and businesses,” he said.