By Ben Crompton, Managing Partner, Crompton Partners
Abu Dhabi’s residential rent index rose 21.82 percent in 2025, yet sitting tenants are legally protected from any renewal increase above five percent. That gap — between what the market is doing and what a landlord can charge an existing tenant — is now the single most contested issue at the table when leases come up for renewal.
The 21.82 percent figure comes from Reidin’s December 2025 report. Cushman & Wakefield put annual rental growth in the emirate at about 23 percent by the same point, and Bayut’s H1 2025 report showed affordable apartment rents rising up to 21 percent. Whichever number you use, the difference with the regulated five percent renewal cap is enormous. And it is causing friction.
What the law actually says
The framework is Law Number 20 of 2006, amended by Law Number 4 of 2010 and — critically — by Resolution Number 14 of 2016, which reintroduced the annual five percent cap with effect from 13 December 2016 and applies to residential, commercial and industrial leases alike. Under Article 16 as amended, a landlord may not increase the rent specified in the contract except once each year by no more than five percent of that rent, and any change for residential rents requires at least two months’ written notice before the expiry of the lease contract.
That is the protection. The complication sits in Law Number 4 of 2010, which entitles landlords to evict tenants when the tenancy contract expires (if they have given the two months notice before such expiry). The cap protects the rent. It does not protect the tenancy. Some landlords still think the pre-2010 law still applies where eviction was only permitted if the landlord wished to move in, but eviction can now be for any or no reason.
The procedure is similar in the ADGM which has a different set of laws. The real estate Regulations of 2024 require the landlord to give 90 days notice of a rent increase, again capped at 5%, but there is no limit on the landlord giving the tenant notice to vacate upon expiry of the lease.
The workarounds landlords are using
In a market rising at four times the legal cap, a predictable cottage industry of workarounds has emerged.
The most aggressive is the mass non-renewal — the landlord declines to renew, the tenant vacates, and the unit is re-let at the open market rate to someone new. Whole buildings have been turned over this way.
The second is the Tawtheeq reset. Both parties agree, on paper, to cancel the existing contract and open a fresh Tawtheeq registration at the new figure — because the five percent cap stops the renewal of an existing contract, not on a “new” one. It is legally fragile, but it happens regularly when a tenant would rather pay more than move.
The third is key money — an off-contract lump sum paid at renewal to compensate the landlord for the gap between five percent and the real market. This sits well outside the law and leaves no audit trail.
If the tenant can get written evidence that the eviction is to raise the rent, then they could, in theory, raise this with the appropriate authority (the Rent Tribunal or ADGM).
But landlords are being quite canny about this. I have heard of tenants agreeing to cancel the Tawtheeq and sign a second one (the Tawtheeq reset), but after the first one was cancelled, they opened a case against the landlord. That is still ongoing and has left the tenant without a legal tenancy contract for the time being.
Outlook
The cap was reintroduced in 2016 to stop exactly this kind of dislocation, and the Abu Dhabi Rental Dispute Settlement Committee has been applying the five percent cap consistently since the regulation took effect.
But the renewal-refusal route under Law Number 4 of 2010 remains open. The way the cap operates has left a gap between intention and application, which in a market with rapidly rising rents, needs to be addressed quickly.
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About the author: As Managing Partner of Crompton Partners, Ben launched the now-award-winning real estate firm in 2012, where he oversees the sales and leasing teams and manages the company’s overall strategic direction in Abu Dhabi.
Specialising in the investment and legal side of property and real estate in Abu Dhabi, Ben is a renowned media figure, regularly called upon for his opinions.
As holder of a Bachelor of Law degree from the University of Cambridge, he is uniquely positioned to write a significant amount of guidance on the legal and practical aspects of leasing and selling land, buildings and individual property.
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