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Know your Tenancy Rights and Obligations Before Renting in Dubai

8/1/2014

Tenancy contracts may not be unilaterally terminated by either landlord or tenant, unless otherwise agreed between the parties.

After finally selecting the desirable property, tenants are so excited about their new home and usually don’t pay enough attention at what they are signing with landlords. Inquiries and questions tenancy relationship are often raised at the time of renewing the tenancy contracts. The following is a brief guide on both landlords and tenants’ rights and obligations.

At the outset, you need to know the laws in question which are:

  1. Law no. 26 of 2007 (regulating the relationship between landlords and tenants in Dubai), as amended by Law no. 33 of 2008;
  2. Decree no. 26 of 2013 (establishment of Rent Disputes Settlement Centre);
  3. Decree no. 43 of 2013 (governing rent increase). As per law, a tenancy contract must include details of the relevant property, details of landlord and tenant, purpose and term of tenancy, amount of rent and payment terms, and other brief details, if any. Practically, an addendum to the standard “one page” tenancy contract, to include further terms and conditions of the relationship, is recommended to be attached to the tenancy contract, especially, with respect to contracts which involve free hold properties such as: payment of charges (i.e. service, chillers, electricity, etc.), grant of a no objection letter (NOC) from landlords to carry on fit out works, renewal and increase of rent, etc.

It is mandatory for either landlord or tenant to register the tenancy contract with Real Estate Regulatory Agency (RERA). 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 the same shall not be entertained by the Dubai Rent Dispute Settlement Centre (RDSC) (formerly “Rent Committee”).

Tenancy contracts may not be unilaterally terminated by either landlord or tenant, unless otherwise agreed between the parties. However, if the tenancy contract has expired and tenant continued his occupancy of the property without objection from landlord, the term of tenancy shall be extended, on same terms and conditions, for a similar period OR for a period of one (1) year, whichever is less. If landlord desires to amend or tenant desires not to renew the tenancy contract, a written notice of at least 90 days prior to the expiration of the tenancy contract must be served to the other party.

The rent is normally paid as per the agreed terms in the tenancy contract. If there is no such agreement, the rent shall be paid in annual four equal instalments. Payment of rent is usually made by depositing post-dated cheques with landlord. However, if landlord refuses to receive the rent, tenant may deposit the rent with the RDSC. RERA shall have the exclusive authority to specify the percentage of rent increase in Dubai. The RERA website (www.dubailand.gov.ae) also provides for a rental increase calculator for calculating the increase in rent as permissible by law.

Landlord is responsible for handing over the property to tenant in good condition, undertaking major maintenance and repair works in the property, not to make any changes in the property which may affect tenant’s intended benefit, and to provide tenant with all approvals required by government authorities to execute fit out works in the property.

In return, tenant is responsible to pay the rent on due dates and all other government charges and fees (as agreed), preserve the property in good condition, not to make any changes, renovations or maintenance works without landlord’s permission, and finally to return the property to landlord in the same condition as handed over, normal wear and tear are acceptable.

However, Landlord may demand eviction of the tenant prior to expiry of tenancy contract if tenant: (i) fails to pay the rent within 30 days of landlord’s written notification; (ii) subleases the property without landlord’s prior written approval; (iii) uses or allows others to use the property for illegal or immoral activities; (iv) causes or allows others to cause damage or changes to the property that endangers safety of the property; (v) uses property for purposes other than the purposes for which it was leased for; (vi) fails to comply with any of the terms of the tenancy contract or the law, Or if the property is in danger of collapse. In the commercial property, Landlord may demand eviction, if tenant has closed for 30 consecutive or 90 non-consecutive days without valid reasons.

At the expiry of the tenancy contract, landlord may demand eviction if: (i) landlord wishes to demolish or reconstruct the property; (ii) development requirements in Dubai require demolition and reconstruction of the property; (iii) the property requires renovation or comprehensive maintenance; (iv) landlord wants to sell or use the property for his personal use or for his relatives of first degree. In such cases, landlord must provide tenant with 12 month’s written notice prior to the determined date of such eviction, through notary public or registered mail.

If landlord or tenant dies, the tenancy contract shall not expire unless tenant’s heirs decide to terminate the tenancy contract by a 30 days prior written notice to landlord. Also, the sale of a property to a new landlord shall not affect tenant’s right to continue occupation of the property in accordance with the terms of the tenancy contract signed with the previous landlord.

Finally, it is recommended that prior entering into a tenancy contract, tenant should carefully examine the title deed of the property to ensure that the landlord is the rightful owner of the property and that the payment of rent is made to the correct person, either landlord or his legal representative.

For more information about this article, please contact Ashraf El Motei at a.motei@motei.com

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