Tenancy

Do you know your rights?

The laws of the United Arab Emirates contain a variety of peculiarities for both tenants and landlords. We undertake the following tasks for you so that you will not stumble over potential pitfalls:

  • Drafting and reviewing tenancy contracts for commercial and residential premises
  • Consulting on tenancy related questions, such as termination, rent increase, sublease and change of ownership
  • Assisting in registering tenancy contracts (EJARI)
  • Liaising with brokers

Overview

Each Emirate disposes of its own rental regulations. Be informed about the tenancy law prevailing in the Emirate of Dubai below:

1. Tenancy Law in the Emirate of Dubai

General provisions regarding lease can be found in the UAE Civil Code. However, each Emirate has issued its own laws concerning the relationship of landlords and tenants of residential and commercial premises.

The following legal framework is applicable in the Emirate of Dubai.

2. Legal Basis

Law No. 26 of 2007 as amended ("Dubai Landlord and Tenant Law") constitutes the primary legal basis in the Emirate of Dubai. In addition, several complementary regulations and by-laws apply.

3. Constituting a Landlord and Tenant Relation

Before signing a tenancy contract, the designated tenant should determine whether his future landlord is undoubtedly the owner of the property.

a. Rental Period
It is common practice to define a rental period in the tenancy contract. Usually, the rental periods range from one year up to three years. Contrary to popular belief, the legislator does not treat a provision on a certain rental period as a fixed-term tenancy contract. Instead, the stipulation of a rental period shall enable the contracting parties to renegotiate the terms of the lease at the end of the period, most notably the increase of rent.

b. Rent
According to the Dubai Landlord and Tenant Law, the rent is to be paid every quarter in advance unless the parties have mutually agreed upon other terms. In practice, the annual rent is usually divided into up to four instalments and payable by post-dated cheques.

When renegotiating the rent for the purpose of renewing the tenancy contract, the tenant's interests are protected by Dubai Decree No. 43 of 2013. According to this law, the landlord may not increase the rent arbitrarily but has to abide by statutory provisions.

c. Registration
It is mandatory to register all tenancy contracts with the database EJARI, which is operated by the Real Estate Regulatory Authority ("RERA"). On the basis of the incoming data, RERA compiles a rent index. The rent index is accessible to the public through the so-called Rental Increase Calculator. Thus, the tenant is able to determine upon the expiration of his tenancy contract whether the landlord is entitled to increase the rent.

4. Termination

According to the Dubai Landlord and Tenant Law, the termination of a lease is only possible within strict legal prerequisites. From a legal perspective, one has to differentiate between the termination prior to expiry of the rental period and the termination upon expiry of the rental period.

Prior to the expiry of the rental period, the lease cannot be terminated unilaterally by either party in principle. The Dubai Landlord and Tenant Law only regulates exceptions which enable the landlord to terminate the tenancy contract prior to expiry of the rental period. Upon expiry of the rental period, the landlord may only terminate the tenancy contract in case of reasons enumerated in the Dubai Landlord and Tenant Law and by observing a 12-month notice period. The tenant's right to terminate the tenancy contract upon the expiry of the rental period is no longer provided for by the statute.

The parties may agree on additional termination clauses upon concluding the tenancy contract. However, in case a dispute arises such clauses might be deemed invalid.

5. Legal Disputes

The Rental Dispute Settlement Centre, which is part of the Dubai Land Department, has jurisdiction over all tenancy related disputes unless the parties agreed to refer any dispute to arbitration.

Further Information

The top three facts every tenant in Dubai should know

Published on 03.11.2016

The Right Path to a Relaxed Tenancy

AHK Newsletter Law and Taxes, November 2014, p. 11 f.