As having one of the most well-organized real estate industries in the world, the United Arab Emirates (UAE) has established competent rules and regulations that protect the landlords and the tenants, especially in the emirates of Abu Dhabi and Dubai. The success of the Ejari system in Dubai led to the introduction of the mandatory Tawtheeq system for tenancy contracts in Abu Dhabi, under the government’s Vision 2030.
The municipalities in the emirate of Abu Dhabi City, Al Ain, or the Western Region are obligated to form and preserve a register of tenancy contracts under the Executive Council Resolution No. (4) of 2011 (“Resolution No. (4)”) that came into effect on 31 January 2011. This aids in the formalization of the tenancy agreement and maintains transparency between landlords and tenants, thereby minimizing disputes. Resolution No. (4) eliminates the discretion provided by Law No. (3) of 2005 (“Law No. (3)”) of authorizing the registration of leases that have been in existence for more than four years. All tenancy contracts of less than four years must be registered, despite existing before Resolution No. (4) or entered into after that date. Landlords were given six months until 31 July 2011 to complete all registrations.
To streamline the rental transactions in Abu Dhabi, the Tawtheeq tenancy contract was introduced. Utilizing a state-of-the-art digital system, it aims to function as a bilingual (English and Arabic) repository of all the data regarding villas and apartments available to rent in Abu Dhabi. This system was proposed to simplify the leasing procedure and to maintain the quality and accuracy of the information to evade unwanted conflicts.
A Tawtheeq contract needs to be issued following all the compulsory procedures when a new rental agreement is signed in Abu Dhabi, post-Resolution No. (4). A key difference between Tawtheeq and Ejari is that the registration process of Tawtheeq is carried out by the property owner or the real estate consultants managing the property, in contrast to the tenants in Dubai. The Tawtheeq system is operational online and the information will be available only to landlords and their appointed property managers. Though landlords are not required to provide any evidence of their own while registering their properties, cross-checks will be made legally with land registration records.
All the tenancy contracts must be either in English and Arabic or in Arabic only, with the Tawtheeq rejecting tenancy contracts that are only in the English language. A compulsory standard form structure of a tenancy contract is published by the Tawtheeq to derive the key information from all the applications, which will then be inputted into the Tawtheeq system. If there are any special conditions negotiated between the landlord and the tenant, it needs to be mentioned in the contract. The Tawtheeq will review these conditions and ensure their legality. If the special conditions pass the review, the application for the registration of the tenancy contract is approved. The reviewal is expected to be completed in approximately five days. Tawtheeq will only allow registration of a tenancy contract that breaches the rent cap that is currently set at 5% if the tenant confirms that he understands that the tenancy contract will breach the rent cap.
Landlords and property managers who need to register for a Tawtheeq contract are obligated to open an account on the Abu Dhabi Municipality’s website. All Tawtheeq registration procedures can be done via the Smart Hub platform. Parties can also register in person, by visiting the Customer Service Centre at the Municipality of Abu Dhabi City (Head Office) or one of the Municipality’s affiliated external centers or customer service outlets.
All tenancy contracts have a standardized form that requires the landlords or property managers to provide the necessary details regarding the rented property. In the event of a mismatch between the information in the form submitted and that in the Municipality’s database, or any other discrepancies in the submission, the Municipality will contact the applicant and ask to resubmit the form.
Homeowners in Abu Dhabi are required to submit the following documents while registering for the Tawtheeq contract:
If the property is owned by a company, these additional documents need to be submitted:
Property management companies or property managers are required to submit the following documents while registering:
Additional documents need to be presented after the account has been created including the tenancy forms, details of the tenant, copies of valid Emirates ID, etc.
There are multiple fee amounts associated with registering for Tawtheeq, some of which are payable by the landlord, while others by the tenant. These are:
The Tawtheeq contract is required to connect to the electricity and water services provided by the Abu Dhabi Distribution Company (ADDC). Generally, the services are supplied automatically after the registration is completed. Failure to apply for a Tawtheeq contract or renew a Tawtheeq contract can result in the disruption of water and electricity services. Moreover, if a landlord fails to register a property, a tenancy contract, or amendments to a tenancy contract, the tenant may apply to issue a judgment on the validity of the tenancy contract at the Rental Disputes Settlement Committee (“Rent Committee”). If suitable, the tenancy contract or amendment will then be recorded in the Tawtheeq database and the fee of registration will be borne by the landlord. If the proceeding is found to be doubtful, then the tenant is always allowed to take the guidance of a prominent legal team, who are experts in property disputes. Until the judgment on the validity has been issued followed by the completion of the registration, the Rent Committee would not hear any other complaints from the tenant.
Two months prior to the expiry date, the tenants are notified by the municipality regarding the renewal of the Tawtheeq contract. The renewal is necessary to continue availing the services of the ADDC. According to Executive Council Resolution No. (56) of 2010 (modifying the provisions of Law No. (20) of 2006), a landlord has the right to request a tenant to vacate and can refuse to renew a tenancy contract or lease, if a prescribed notice had been given to the tenant. For residential properties, a minimum of two months’ written notice is necessary, while for commercial properties require three months’ written notice.
For the renewal of the contract, the landlord or property developer needs to utilize the online portal and update the status of the tenancy contract on the Tawtheeq account that was formed at the time of creating the Tawtheeq contract. A charge of AED 100 will be levied on proceeding with the renewal.
In any event of non-renewal of the contract, the Abu Dhabi Municipality needs to be notified before the expiry of the contract. The common occurrence is that of a property owner not renewing the contract with the existing property management company. The property owner can now request a new contract with another property management company to open a Tawtheeq account as the owner and the manager of the property.