21 Apr 2022
It is necessary to familiarize yourself with a country’s tenancy laws before signing any tenancy contract on its land. Different countries and states have their own tenancy laws regulating the tenancy process transparent and reliable to the contracting parties. The United Arab Emirates, its every emirate has its tenancy laws. Similarly, the Real Estate Regulatory Agency (RERA) directions, laws, and regulations in Dubai regulate tenancy contracts between landlords and tenants, namely, Law Number 26 of 2007, amended under Law Number 33 of 2008 (the Tenancy Law).
This law governs the tenancy contracts and sets forth terms and conditions for a valid and legitimate tenancy agreement. It confers tenants’ and landlords’ rights and obligations, respectively, in Dubai except for the Dubai International Financial Centre (DIFC) rent matters; it has its Tenancy Laws, namely, DIFC Leasing Law Number 1 of 2020, to regulate lease matters within the DIFC.
In this article, we will discuss all the aspects of tenancy laws in the emirate of Dubai. The RERA has introduced particular contractual obligations and terms for the smooth operation of tenancy-related matters. For a tenancy contract to be valid, it must be in writing and have all the relevant details of the landlord, tenant, type of property, rental value, payment mode, lease term, etc. The tenancy contract should be registered with the Real Estate Regulatory Agency (RERA) through Ejari under Article 4 of Law Number. 33 of 2008. The term of tenancy shall be specifically mentioned in the tenancy contract. If the tenant keeps possession of the rented premises and continues living in it after the expiry of the tenancy contract, without any objection from the landlord, in that case, such agreement would be extended for a similar period or for one year (whichever is less) on the same terms and conditions of the contract, under Article 6 of Law Number 26 of 2007. A valid and due tenancy contract shall not be terminated unilaterally by the landlord or the tenant, mutual consent of both parties required to terminate the contract before its expiry. If the tenant subleases the rented property (with the landlord’s permission, otherwise he is not allowed to sublease), such a sublease contract will conclude with the expiry of the tenancy contract except if the landlord agrees to extend the sublease period. At the same time, if the tenant intends to renew the tenancy contract and any of the party to lease contract either the landlord or the tenant wish to make changes in the previous contract by increasing or decreasing rental value or any other terms and conditions, the party not aiming to extend or intends to amend the contract shall serve the other party with a notice minimum 90 days before the expiry of the existing contract or within the notice period agreed on in the tenancy agreement according to Article 14 of the Tenancy Law.
In the tenancy contract, the determined and agreed rental value should be explicitly mentioned under Article 9 of the Tenancy Law, in case the rental value is not mentioned in the contract, then the rental value would be fixed by the RERA according to the rent of the similar units and the increasing percentage of rent criterion and considering economic condition of the emirate. If the property’s rent is 10% less than that of such a unit’s market price in its area, then no rent increase is allowed. Decree Number 43 of 2013 governs rent increase matters in Dubai and defines the percentage of increasing rent. It is the responsibility of the landlord to maintain his Rental Laws in Dubai. During the lease period and handover, the property is in good condition to the tenant, and the tenant is also liable to take care of the rental property.
At the expiry of the contract, he should hand it over to the landlord in a usable condition. The landlord may obtain a security deposit for the maintenance of the property to ensure the proper maintenance of the property, and he is liable to refund the deposit at the expiry of the tenancy contract.
A landlord can demand eviction of the tenant before the expiry of the tenancy contract under Article 25 of Law Number 26 of 2007 on the following grounds: i. If the tenant fails to pay rent;
ii. If the tenant subleases the property without the permission of the landlord; iii. If the tenant himself or allows others to use the property for any unlawful, immoral, illegal purposes;
iv. If the leased property is a retail store is not in operation for 30 days consecutively or 90 intermittent days of a year;
v. If the tenant introduces changes to the building, it inflicts damage to it and affects the building’s safety;
vi. If the tenant uses the property for some other purpose instead of using it for the purpose, it was rented for;
vii. If the property is in a condition to get collapsed anytime;
viii. If the tenant fails to abide by the laws set by the provisions of Tenancy Law; and
ix. If the Urban development requires demolishing the building to re-build it. At the tenancy contract expiry, the landlord can request the tenant to evict the property if he intends to demolish and re-build the building and start any restoration and maintenance work for personal use or next of kin use or intends to sell the property.
The landlord shall notify the tenant, mentioning the reason for eviction through notary public or registered post twelve months before the eviction plan. If the landlords evict the property for his personal use or his next of kin use, he cannot rent the property to any other person until the lapse of two years period for residential properties and three years for no-residential properties from the date of getting possession of the property.
Under Article 27 of the Tenancy Law, at the death of a tenant or landlord who does not end the tenancy contract, the relationship shall be transferred to their heirs, except the tenants heirs decide to terminate the contract by notifying the landlord 30 days before the termination. Similarly, if the landlord’s title is transferred to another person, it shall not affect the tenancy contract according to Article 28 of the Tenancy Law. The tenant will have the priority rights over the demolished and re-built building or renovated. The tenant can avail of this priority right within 30 days after getting notified by the landlord in this regard. If any rental dispute arises between the landlord and the tenant in Dubai and they fail to reach any solution, they can file a rental dispute case with their representative at the Rent Dispute Resolution Centre (RDC) established under Decree no. 26 of 2013. The RDC has jurisdiction over all rental disputes in Dubai, except Financial lease contracts and Rent dispute cases in Dubai free zones like DMCC, JAFZA, and Tecom.