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

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Overview

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.

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.

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 in the Emirate of Dubai are protected by 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 Dubai Land Department ("DLD"). The standard tenancy contract issued by the DLD must be used when concluding a lease. All other tenancy contract forms cannot be registered and are generally rejected by the DLD as insufficient. It is, however, advisable to agree on additional terms supplementing the standard tenancy contract.

On the basis of the incoming data, the DLD compiles a rent index. The rent index is accessible to the public through the so-called Rental Index Calculator. Thus, the tenant is able to determine upon the expiration of his tenancy contract whether the landlord is entitled to increase the rent.

According to the Dubai Landlord and Tenant Law, the termination of a lease is only possible within strict legal prerequisites. Tenants and landlords have different rights in this respect.

For the tenant, the law does not provide for the right to terminate the contract before the expiry of the current rental period. If the tenant wishes to terminate the contractual relationship at the end of the current rental period, he is obliged to inform the landlord at least 90 days before the end of the contractual period unless another deadline has been specified in the tenancy contract.

The landlord, in contrast, does not have this simple option for terminating the tenancy. Instead, one of the reasons expressly stated in the law must exist and a formal eviction notice must be issued.

The parties may agree on additional termination clauses upon concluding the tenancy contract. However, in the event of a dispute, there is a risk that corresponding provisions will be deemed invalid, in particular those in favour of the landlord.

The Rental Disputes Center, which is part of the DLD, has jurisdiction over all tenancy-related disputes unless the parties agreed to refer any dispute to arbitration.