A new property law has been introduced in Abu Dhabi which makes it easier for landlords to evict tenants and raise rents.

The legislation enables judges to settle rent disputes under the umbrella of the Ministry of Justice, and it removes the automatic right of tenants to renew leases for five years with a maximum +5% rent increase each year.

The new law will be active by November 2010, but the current 5% rent cap will remain, however landlords will now be able to evict tenants at the end of the lease period, after giving two months notice for residential property and three months for commercial property, and take on new tenants at a renegotiated rent.

Property analysts were divided on the effect on rents of the new law with some stating it would benefit landlords and property investors by effectively establishing a “floor” for rents, however others believe that downward pressure on rents in Abu Dhabi would continue as more units came on to the market and the rents in Dubai remain more competitive.

Rents more than doubled in the capital between 2006 and 2008, and barely decreased during the economic downturn because of a lack of accommodation on the market. With many landlords unable to remove tenants or, because of the mandatory 5% cap, raise rents in line with the market.