With Abu Dhabi Real Estate Centre Freezing Rent Hikes, Will Dubai and the Northern Emirates Follow

On Tuesday, 2 June 2026, the Abu Dhabi Real Estate Centre (ADREC) issued a circular with immediate effect announcing that no increase in rent will be permitted beyond the rate set in the previous or current tenancy contract for a given property. The circular applies to both the renewal of existing tenancy agreements and the registration of new contracts for new tenants meaning that the rental rate for any property must remain at the same level as the rent most recently registered on that property. The circular remains in effect starting today until further notice.

The Principle of Contractual Freedom in Tenancy Agreements

At the outset, it is important to recognise a foundational principle of contract law that applies across the UAE and the broader civil law tradition: the principle that the contract is the law of the contracting parties — al-ʿaqd sharīʿat al-mutaʿāqidīn. This principle, deeply rooted in both Islamic jurisprudence and codified civil law, holds that a validly formed contract is binding upon its parties and that its terms  are a matter for the bargaining and discretion of the contracting parties themselves. The rent payable under a tenancy agreement is, in the first instance, a private matter to be freely negotiated and agreed between landlord and tenant.

This principle of party autonomy means that the particulars of a tenancy contract, including the amount of rent, the duration of the lease, payment terms, and other conditions, are ordinarily left to the parties to determine. UAE law, including Law No. 20 of 2006 which established the core legal relationship between landlords and tenants in Abu Dhabi, respects this principle by allowing the parties to fix the rent by agreement within the lease.

However, while contractual freedom is the default, it is not absolute. From time to time, regulators may (and do) intervene to override or constrain the terms that parties might otherwise freely agree. Housing is also a social necessity that directly affects the safety, security, and wellbeing of a population. When market forces produce outcomes that may be considered harmful to the community, such as rapidly escalating rents that threaten affordability, displace residents, or destabilise the social fabric, governments and regulatory authorities may justifiably step in to impose limits on what would otherwise be a purely private arrangement.

ADREC Circular: A Full Freeze on Rent Increases

Against this backdrop, ADREC’s circular of 2 June 2026 provides that no increase in rent whatsoever will be permitted beyond the rental rate set in the previous or current tenancy contract registered on a given property. This applies equally to the renewal of an existing tenancy agreement for a sitting tenant and to the registration of a new tenancy contract for a new tenant taking occupancy of the same property. In other words, the rent follows the property, not the tenant: regardless of whether the landlord is renewing with the same tenant or entering into a fresh agreement with a new one, the rental rate must remain at the same level as the rent most recently registered.

It is essential to clarify the legal nature of this measure. The ADREC circular is not a new law, decree, or formally enacted regulation. Under ordinary legislative procedure, new laws and regulations are typically published in the Official Gazette and may include advance notice periods or transitional provisions. The ADREC circular, by contrast, is an administrative directive issued by the real estate regulator in its capacity as the authority responsible for the registration of tenancy agreements through the Tawtheeq system. This means that ADREC will only accept for registration those tenancy contracts that reflect the same rent as the previous contract on the relevant property. Since Tawtheeq registration is a mandatory prerequisite for a tenancy contract to be legally enforceable in Abu Dhabi, the effect of the circular is, for all practical purposes, equivalent to a binding freeze on rent increases. A landlord who attempts to register a contract at a higher rent will simply be unable to do so.

Has a Similar Circular Been Issued Elsewhere?

Following the issuance of the ADREC circular, tenants and landlords in other emirates may naturally wonder whether similar measures have been adopted in Dubai, Sharjah, or elsewhere. To date, no equivalent circular or administrative directive has been released in Dubai or in any other emirate. The rental regulatory frameworks in each emirate continue to operate under their existing rules.

However, it is worth noting that the current trend across much of the UAE rental market is one of stabilisation. The markets suggest that rents across several emirates have plateaued or are growing at more moderate rates than in previous years, and that both tenants and landlords are broadly accepting of current rental levels rather than pushing for increases.

Nonetheless, for tenants, the Abu Dhabi rental circular provides immediate and comprehensive protection: no rent increase, whether upon renewal or upon the entry of a new tenant, for as long as the circular remains in force.