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What Do you Need to Know Before Renting in Dubai | Property Lawyer
What Do you Need to Know Before Renting in Dubai
By April 13, 2015

Q. What are the laws which govern the relationship between landlords and tenants in the Emirate of Dubai?
A. (1) Law No. 26 of 2007 regulating relationship between landlords and tenants in the Emirate of Dubai; (2) Law No. 33 of 2008 amending some provisions of Law No. 26 of 2007 regulating relationship between landlords & tenants in the emirate of Dubai; (3) Decree No.2 of 1993 establishing special judicial committee for settlement of disputes between landlords and tenants; (4) Decree No.2 of 2011 regulating rentals in Dubai; and (5) Decree No. 26 of 2013 establishing the Dubai Rent Dispute Settlement Centre as part of the Dubai Land Department in the emirate of Dubai are the laws which deal with rights and obligations of tenants in relation to their tenancy contract.

Q. What is a tenancy contract and what provisions should it contain?
A. Tenancy contract (or Lease) is a brief/ standard contract containing terms and conditions which govern the relationship between landlord and tenant. The tenancy contract should include the description of the property in details, purpose of the tenancy, period of tenancy, amount of rent and any other terms which may be agreed on between tenant and landlord at the time of contracting. In practice, an addendum (which contains further terms and conditions of the relationship) is recommended to be attached to the tenancy contract.

Q. Is the tenancy contract required to be registered?
A. Yes. It is mandatory for either the landlord or tenant to register the tenancy contract with Real Estate Regulatory Agency (RERA) by submitting the required documents along with the prescribed fee. Registering the contract also ensures that the same property is not rented out twice at the same time. If the tenancy contract is not registered, any dispute arising out of or in relation to such tenancy contract shall not be entertained by the Dubai Rent Dispute Settlement Centre (formerly “Rent Committee”).

Q. Is the period of tenancy required to be fixed?
A. Yes, otherwise, tenancy contract shall be deemed as valid for the period specified for payment of the rent.

Q. During the term of tenancy, can the tenancy contract be unilaterally terminated?
A. If the tenancy contract is due and valid, it cannot be unilaterally terminated by the landlord or the tenant, unless both parties agree on such termination or in accordance with the provisions of the law.

Q. Who has the authority to decide upon the percentage increase in rent of the property?
A. RERA shall have the exclusive authority to specify percentage of rent increase in Dubai, with regard to economic circumstances. The RERA website also provides for a rental increase calculator for calculating the increase in rent as permissible by law.

Q. When does a tenant pay rent to the landlord?
A. A tenant shall pay rent to the landlord on the dates agreed in the tenancy contract. However, if there is no such agreement, the rent shall be paid in annual four equal installments to be paid in advance. Such payment is usually made by depositing post-dated cheques with the landlord. However, if the landlord refuses to receive the rent, the tenant may inform RERA and deposit the rent with RERA.

Q. Can the terms of the tenancy contract be amended?
A. Yes. Upon expiry of the tenancy contract, both landlord and tenant may amend any of the contract’s
terms including rent provisions.

If the parties do not reach an agreement on rent, Rent Committee may decide fair rent considering similar market rent in the same area or/ and any other factors Rent Committee may decide.

Q. What is the procedure to amend the provisions of the tenancy contract?
A. If either party desires to amend any of the provisions of the tenancy contract, then that party must notify the same to the other party not less than 90 days prior to the expiry date of the contract unless otherwise agreed between the parties.

Q. What are the obligations of the landlord in relation to the tenancy?
A. In relation to the tenancy, the landlord shall: (i) be responsible for handing over the subject property to the tenant in good condition unless agreed to lease uncompleted property; (ii) be responsible for undertaking major maintenance of the property and rectify any defects or faults (major maintenance is described as maintenance of the structure of the property, drainage, major plumbing, pumping equipment, boiler, sanitation and electrical installations, A/C), unless the two parties agree otherwise; (iii) not make any change in the property, its utilities or ancillaries affecting the intended benefit; (iv) provide tenant with all approvals required by competent authorities in the emirate if he wishes to execute decoration works, or other works, that require such approvals.

Q. What are the obligations of the tenant in relation to the tenancy?
A. In relation to the tenancy, the tenant shall: (i) pay rent on due dates and preserve the property as his own property; (ii) not make any changes, renovations or maintenance works without landlord’s permission, after obtaining necessary approvals from competent authorities; (iii) return the property to landlord in the same condition as handed over to him at the time of contracting except for normal wear and tear or for reasons beyond his control; (iv) pay (unless otherwise agreed) all fees and taxes due to government authorities for benefiting from the property, in addition to any other fees or taxes due for subleasing; (v) not (unless otherwise agreed), upon vacating the property, remove any fixed improvements.

Q. Can the tenant sublease property without landlord’s prior approval?
A. Unless otherwise agreed in the tenancy contract, the tenant shall not assign the benefit or sublease the subject property without obtaining landlord’s prior approval.

Q. Can the landlord demand eviction of the tenant prior to expiry of the tenancy period? If yes, under what circumstances?
A. Landlord may demand eviction of the tenant prior to expiry of tenancy period if: (i) tenant fails to pay the agreed rent within 30 days of landlord’s notification for payment; (ii) tenant subleases the property without landlord’s written approval; (iii) tenant uses or allows others to use the property for illegal or immoral activities; (iv) tenant causes or allows others to cause damage or changes to the property that endangers safety of property; (v) tenant uses property for purposes other than purpose for which it was leased for; (vi) property is in danger of collapse; (vii) in general, tenant fails to comply with his
contractual obligations even after 30 days’ notification from landlord.

Q. Under what circumstances can the landlord demand eviction of the tenant on expiration of the tenancy period?
A. Landlord may demand eviction of tenant upon expiry of tenancy contract if: (i) he wishes to demolish
or reconstruct or development requirements in Emirate require demolition and reconstruction of the property; (ii) the property requires renovation or comprehensive maintenance; (iii) he wants to use the property for his personal use or for his next of kin of first degree. However, the landlord must provide the tenant with 12 month’s written notice prior to determined date of such eviction.

Q. What happens to the tenancy if the tenant/ landlord dies?
A. If landlord or tenant dies, the tenancy relationship shall devolve to their heirs, unless tenant’s heirs decide to terminate that relationship. However, such termination shall be effective according to the applicable procedures upon proper notification to the landlord.

Q. What happens to the tenancy if the property title is transferred to a new landlord?
A. If the tenancy contract has a fixed date, the transfer of title of the subject property to a new landlord shall not affect tenant’s right to continue occupation of the property in accordance with the tenancy contract signed with the previous landlord.

Q. Which is the authority for resolving any dispute which may arise between the landlord and the tenant in relation to the tenancy contract?
A. All disputes in relation to tenancy contract shall be referred to Rent Committee who shall have exclusive jurisdiction to deal with such disputes.

Q. What is the applicable fee for filing a claim before the Rent Committee?
A. The applicable fee for filing a claim before the Rent Committee is 3.5% of the claimed amount up to a maximum of AED 15,000/- for rent claim suits and AED 20,000/- for termination of lease.

Q. What general precautions should a tenant take at the time of entering into a lease?
A. At the time of entering into a lease, the tenant should (i) carefully examine the title deed of the property issued by the Dubai Land Department to ensure that the landlord is the rightful owner of the property; (ii) should obtain proof that the real estate agent (if any) is registered with Real Estate Regulatory Agency; and (iii) ensure that the payment of rent is made to the correct person (either landlord or his agent) according to proper legal document.

About the author:

Ashraf El Motei heads the dispute resolution practice at Motei & Associates, a Dubai based law firm since 2002. Ashraf specializes in commercial and corporate disputes before local courts and international arbitration centers. He is a listed arbitrator at DIAC and registered practitioner before DIFC Courts. For further info on the article, please contact the author at: a.motei@motei.com

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