ADGM rent increase rules are among the most tenant-protective in the UAE. The 5% cap on renewal increases, the 90-day written notice requirement, and the absolute prohibition on mid-term increases (unless expressly agreed) give tenants significantly more certainty than mainland Abu Dhabi or Dubai. This guide covers every scenario with section references.
The iron rule
During the lease term, the landlord cannot increase rent unless the lease explicitly states the amount and timing. On renewal, the maximum increase is 5% of the immediately prior rent, with at least 90 days' written notice before expiry. No notice or wrong amount = no valid increase. The tenant continues paying the old rent.
1. Mid-term rent increase — the prohibition
Section 55(2) creates a clear rule: the landlord cannot increase rent during the lease term unless the lease itself expressly states the amount and timing of any increase. If the lease is silent on mid-term increases, no increase is permitted. Period.
This is an absolute prohibition, not a default that can be overridden by market conditions. A landlord who demands a mid-term increase without an express lease clause has no legal basis for the demand, and the tenant is entitled to continue paying the original rent.
2. Renewal increase — the 5% cap
Section 61 governs rent increases on renewal. The rules are:
- Maximum increase: 5% of the immediately prior rent
- Notice required: written notice at least 90 days before the expiry date
- No notice given: increase is invalid, rent stays at the same amount
- Notice given but wrong amount (above 5%): increase is invalid
- Notice given but less than 90 days before expiry: increase is invalid
3. Complete rent increase scenario table
| Scenario | Allowed? | Cap | Notice |
|---|---|---|---|
| Mid-term, lease silent | No | — | — |
| Mid-term, lease has explicit clause | Yes, per clause | Per clause | Per clause |
| On renewal | Yes | 5% | 90 days written |
| Renewal, no notice given | Invalid | Rent stays same | — |
| New lease (not renewal) | Market rate | None | — |
| Board market index issued | Per index | Per index | Per index |
4. Rent payment rules — section 55
The lease must specify the rent amount, payment method, and frequency. If the lease is silent on any of these, the defaults apply:
- Amount: market rent
- Frequency: monthly in arrears
- Method: bank transfer
Receipts are mandatory for all rent payments. The landlord must keep records for at least one year after the lease expires.
Reservation deposit
Under section 55(5), the landlord may take a reservation deposit of up to 5% of the annual rent. This must be set off against the first rent installment or refunded. Critically, under section 55(6), the landlord may hold only one reservation deposit per property at a time — taking deposits from multiple prospective tenants on the same property is prohibited.
5. Security deposit rules — section 53
The security deposit is capped at 5% of the annual rent. The landlord holds it on trust for the tenant — it is not the landlord's money. Permitted deductions:
- Unpaid rent
- Breach of the lease
- Damage beyond fair wear and tear
- Repairs the tenant was responsible for
Fair wear and tear is not deductible. Damage caused by the landlord is not deductible. The landlord must provide an itemised deduction notice with supporting evidence within 21 days of the end of the tenancy. The balance must be refunded as soon as practicable.
6. Service charges — section 58
The default position is that the landlord pays community and building service charges. If the landlord fails to pay, the tenant can pay directly and set the amount off against rent. If rent has been prepaid, the tenant can sue for the amount as a debt.
7. Utilities — section 59
The lease must specify who pays for utilities. For non-metered shared services, the tenant pays a fair portion. If the landlord fails to pay a utility it covenanted to cover, the tenant can pay directly and set off against rent. Section 59(4) absolutely prohibits cutting utilities to coerce the tenant.
8. Common landlord mistakes
| Mistake | Consequence |
|---|---|
| Counting 90-day notice from new term start, not expiry date | Notice is late — increase invalid |
| Increasing >5% citing market conditions | Increase invalid — section 61 cap is absolute |
| Sending notice <90 days then claiming tenant must accept or leave | Constructive forced exit — Court applies section 61 strictly |
| Demanding rent advance beyond 5% reservation deposit | Exceeds section 55(5) cap — unenforceable |
| Withholding deposit without 21-day itemised notice | Must return full deposit — section 53(1)(c) |
| Raising rent mid-term without express clause | Prohibited by section 55(2) — tenant continues paying old rent |
9. Tenant defence strategy
If the landlord demands an invalid increase:
- Ignore the invalid increase and continue paying the old rent
- Send written notice to the landlord citing sections 55(2) and 61 as applicable
- Force the landlord to either accept the lawful rent or take Court action
- If the landlord refuses renewal at the lawful rate, file before the ADGM Courts
- The Court applies section 61 strictly — the landlord will lose
This article is for general information only and does not constitute legal advice. For advice on a specific ADGM real property matter, please contact us. Last updated: 19 May 2026.