A discourse on Rental Disputes in the UAE

UAE has 89% expat population and welcomes over 200,000 new arrivals each year. Most of the expat population that comes in search of jobs permanently settles down here. With over 200 nationalities presently residing and the influx of new immigrants every year, the Tenancy law of the UAE is robust, elaborate, and pro-tenant.

From the second angle, just 11% of the population are UAE citizens, the rest are quintessentially immigrant workers with different home countries. This implies a high percentage of reentering population and a very volatile Real Estate market in the UAE. And that brings us to the high statistics of rental disputes and the niche expertise of rental dispute lawyers in Dubai. Dubai’s Rental Dispute Settlement Center (RDC) was established in 2013 as a judicial arm of the Dubai Land Department (DLD) and it purely exists for the management of rental disputes employing new methods with flexible mechanisms for accurate, swift and transparent executive of matters related to Dubai Real Estate. The Rental Dispute Settlement Center of Abu Dhabi is called Abu Dhabi Rent Dispute Settlement Committee (RDSC). Likewise, other Emirates in UAE have their own Rent Regulation Department.

When speaking about rental issues, what are some of the most common concerns that crop up between a landlord and a tenant? Unequivocally, these are arbitrary rent increase and eviction by landlords seeking higher rents given the improving market conditions or for other common issues like property’s maintenance, property damages, lease violations, pet menace, partial or delayed payments, resistance to increase in rents, illegal activities eviction etc. Thus, it is important for both the parties entering into the tenancy agreement to be aware of their rights and liabilities as tenant and landlords.

Any tenant is obliged by law to get a home or a property that should have livable conditions and a comfortable environment. In case of any maintenance or repairs, it is the responsibility of the owner to provide with all the amenities along and similarly, the tenant is obligated to pay the agreed rent within the stipulated timeframe. It is the duty of both the landlord and the tenant to avoid all progressions which may lead to rental dispute between the concerned parties.

As per the UAE laws, the relationship between the tenant and landlord is governed by Law No. 26 of 2007 as amended by Law No.33 of 2008 (“Tenancy Law”). In a recent judgement, the Appeal Department of Rental Dispute Centre in Dubai has made certain amendments in relation to eviction and non-renewal clauses. The Article 25(2) lays down four grounds under which any landlord can ask the tenant to evict the house upon the expiry of the contract provided that a prior legal notice of termination is served 12 months beforehand by the Notary Public to the registered mail address of the tenant.

The aspects of the tenancy agreement vital to the landlord and the tenant are presently below:

1. Landlord is legally required to inform tenant 90 days in advance if the rent is going to be increased
As per new law in UAE any landlord will have to notify the tenant 90-days before, in case of changes in the rental contract when it comes to any increase the rents. As per The Real Estate Regulatory Agency rent calculator, only 5% rent increase is allowed after proper consideration of the property’s location, number of bedrooms, property type and renewal date. Hence, the rent can only be increased if the calculator confirms that it is under the permissible rent increase percentile. Also, the maximum allowance for the rental increase is 20% annually.

2. Landlord cannot increase the rent beyond a limit set by the Dubai Land Department (DLD)
Dubai land department (DLD) is opting for solutions for ensuring clarity and enhancing the regulations related to the rental disputes in the country. They have generated an electronic regulatory system for all the parties to access the information pertaining their rights and obligations. This is the most common method used my landlords and tenants to secure their rights.
The service determines the viability of the rental increase based on the average decline in the region’s rental value, the specifications of the unit in question like its utility, location, number of rooms, and a variety of other parameters. The increase has been capped at a maximum of 20% from 21st December 2013, and the increase is stratified as follows:

  • If the rent is 10% less than the market value, there is no increase 
  • If the rent is 11-20% lower than the market value, the maximum increase may be up to 5% 
  • If the rent is 21-30% lower than the market value, the maximum increase may be up to 10% 
  • If the rent is 31-40% lower than the market value, the maximum increase may be up to 15% 
  • If the rent is lower than 40% or more of the market value, the maximum increase may be up to 20% 

This system helps both the parties understand the rental fees of various properties in the region and curb unnecessary rental fluctuations as unwarranted rentals hikes by the landlord may lead to legal action if the tenants are aware of their rights. Significantly, this system serves as a vigilante in protecting tenants’ rights.

3. Landlord cannot cut off electricity and water supply over unpaid rent
The Article 34 Law No. (26) of 2007, Regulating Relationship Between Lessors and Lessees of the properties in Dubai, protects the interest of the tenants in case of discontinuance of the services. The landlord does not hold any authority to cut the supply of water, electricity or any other service that may impede the tenant from fully using the property, even if the tenant fails to pay the rentals. The landlord can secure his rights by filing a legal claim of the outstanding amount with the Rental Dispute Center (RDC) and seek for the tenant’s eviction as mentioned under Article 25 of Law No. (26) of 2007.

4. Landlord is legally required to issue a 12-month notice for these two types of eviction cases: Eviction due to Restoration or comprehensive maintenance and Eviction due to Demolition
As per the UAE law, landlord cannot ask the tenants to vacate for the property except in few cases, including approved demolition for personal use. The eviction notice can also be obtained if the tenant has not paid rent, or if the tenant rented out the property without the prior approval of the landlord or violated any public related norms. In case of demolition or comprehensive restoration, the landlord is required to inform the tenant at least 12 months prior to the eviction in order to get the property vacated.

5. Legal Eviction after 30 days of Notice served to the tenant
The landlord is allowed to legally evict a tenant after 30 days from the date a notice is served to him or her for grounds such as, non-payment of rent, using the property for any illegal purposes or intentional breach of public order, or lease violations when the tenant sublets the property without obtaining the landlord’s approval.

6. Option to verify previous rents via DXBINTERACT.COM
Before moving into a new property, tenants can check the previous rents that were charged for that property on a new platform, viz. DXBinteract.com for reliable data on the property’s transactions from Dubai Land Department (DLD).
To safeguard the rights of the tenants in the UAE, DLD had signed a Memorandum of Understanding with DXB Interact that provides a platform providing details of price changes for properties. A person has the right to check the pervious rents that were charged for a particular property in order to protect his interests, before entering an inflated Tenancy contract.

7. Understand the difference between a Tenancy contract and Ejari
Tenancy contract is different from your EJARI. The tenancy contract is simply your signed agreement with your landlord, while EJARI is the process of registering this agreement with the Dubai Land Department. It is important to note that every tenant signing an agreement with a landlord for renting the property should have the “EJARI” as well.

Related Post: UAE to embrace Corporate Tax Regime

EJARI means “My Rent” in Arabic. It was an initiative of RERA to regulate and facilitate the Rental Market of Dubai. All the individuals and companies acting as landlords will be requirement to register tenancy agreements using EJARI. It provides a unilateral platform for registration of complete portfolio of services beyond just registering the initial lease agreement like renewals, terminations, or transfers. This will include the basic details of property, name of rental company and terms of the agreement. Such a system will increase awareness and transparency for the parties involved in the rental agreement and give their terms and conditions full weightage.

Conclusion:

If you are aware about your rights and responsibilities in the arena of Tenancy Law, you know that legal help is not far from you. Especially with the prevailing pro-tenant legal system, specialized Execution wing and unique supporting platforms disseminating crucial information on the matter, the tenants can feel safe and cared for. In case of any violation of housing laws, any breach of contracts, any failure in providing maintenance or repairs, or any unwarranted deductions from the deposit money, the tenant can always reach out to Rental Dispute Resolution Centre for redressals and protection of their interests.

The specialization of Rental Law and Rental Dispute Execution has given rise to a specialized field of Rental Dispute Lawyers in the UAE. Thankfully, legal advice is just a click away with Lawgical Group. We, at Lawgical, regularly advise clients on such tenancy dispute matters, including filing and managing cases before the competent authority (RDC).



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