- Current Law for Ending a Lease Agreement Early
- Tips for Ending a Lease Early
- Other Important Tenancy Laws
Are you thinking of moving out before your rental contract is up? Before taking the plunge, read up on what the law says regarding the early termination of a tenancy contract in Dubai. MyBayut brings you an overview of the options available to renters when planning to end a tenancy agreement early in Dubai.
WHAT DOES THE DUBAI RENTAL LAW SAY ABOUT EARLY TERMINATION OF TENANCY CONTRACT IN DUBAI?
Wondering if you can end your tenancy early? Please note that the Dubai tenancy law does not have any provision for ending a lease agreement early. The rental law only governs the relationship between landlords and tenants for as long as the contract is valid.
According to Article 7 of Law No. (26) of 2007, the lease agreement is binding on the landlord and tenant, and cannot be terminated by one party without the consent of the other.
Previously, tenants and landlords in Dubai were required to give a 90-day notice period in the case of non-renewal of the rental contract. However, after Law Law No. (33) of 2008 was passed, which amended certain articles of Law 26 of 2007, the 90-day notice period is not required in case either party does not wish to renew the tenancy agreement. Instead, this rental law in Dubai was updated to give priority to the terms outlined in tenancy contracts. Thus, it’s important that tenants make sure that they are aware of the notice period written in the rental agreement.
WHAT IF THERE IS NO EARLY TERMINATION CLAUSE IN THE TENANCY AGREEMENT?
If the tenancy contract in Dubai does not have any clause for early termination, the landlord will have the right to ask for compensation to make up for the tenant breaking the lease and leaving early.
This means that the tenant might have to forfeit their rent for the remaining term of the contract or pay some other amount of compensation to their landlord if they want to go through with the early termination of the tenancy agreement.
HOW TO TERMINATE A TENANCY CONTRACT
Here are some tips that renters can follow while leaving a property before end of tenancy in Dubai:
- Firstly, check your contract for an exit clause which will allow early termination of the tenancy contract. It’s imperative that tenants make sure an exit clause is mentioned in the lease agreement when signing the contract. This will save them a lot of hassle and negotiation if they find themselves in the position of ending a lease agreement early.
- If there is no such clause mentioned in your contract, approach your landlord. Explain the situation and the reason why you need to break your lease agreement. Your landlord might agree to negotiate an exit deal, in which case, you may have to pay a penalty amount.
- Alternatively, you could offer to find a replacement tenant for your landlord, to ensure that they do not suffer any monetary loss. However, if you are not able to find a tenant on time, you will most likely have to provide compensation to the landlord.
THINGS TO KEEP IN MIND WHEN BREAKING A LEASE AGREEMENT IN DUBAI
When breaking a lease agreement early in Dubai, renters should be aware of the following postulates:
- As per Article (15) of Law No. (33) of 2008, the tenant must receive the rental property in good condition, and the landlord is typically required to undertake any major maintenance or repairs required.
- Rental payments in Dubai are typically made through post-dated cheques, which are deposited to the landlord. However, if the landlord does not wish to receive the cheques, they can be handed to the Dubai Rental Dispute Settlement Centre.
- While a standard tenancy contract in Dubai is one page, an addendum can be added to include further terms and conditions of the contract. Always ensure that you are aware of these terms and clauses, which may pertain to payments for utility charges and repairs, or increases in the annual rent.
WHAT TO DO WHEN TENANCY AGREEMENT ENDS?
As per Article 6 of Law No. (26) of 2007, tenant can continue to live in the rental property after the term expires without any objection from the landlord. The agreement will be agreed for the same term or for a year. According to Article 13 of Law No. (33) of 2008, should landlord or tenant decide to amend the terms of contract or review the rent for renewing the agreement, they must do so prior to the expiry of the existing agreement. If they failed to reach an agreement, the Tribunal will set the rent based on criteria established in Article 9 of Law No. (33) of 2008, which includes:
- Percentage of rent increase determined by RERA.
- The economic conditions of the emirate.
- The current condition of the property.
- Average rent of similar properties in the property market.
Can a landlord end a Dubai tenancy contract early and evict the tenant?
According to the Article 25 of RERA tenancy Law (33) of 2008, early termination of lease agreement by a landlord can be demanded, for the following reasons:
- If the tenant fails to pay the rent, or part thereof, within 30 days of being served with the landlord’s written notification; unless all involved parties have agreed otherwise.
- If the tenant subleases the property without the landlord’s written approval.
- If the tenant uses or allows others to utilise the property for immoral or illegal activities.
- If the tenant causes or allows others to cause damage or changes to the property that endanger the safety of the property.
- If the tenant uses the property for purposes other than the purposes for which it was leased for.
- If the tenant fails to comply with any of the terms of the tenancy contract or the law within 30 days from date of notification by the landlord to abide by such obligations or conditions.
- If the property is in danger of collapse.
- If development requirements in the Emirate require demolition and reconstruction of the property in accordance with government authorities instructions.
- In cases of commercial properties, a landlord may demand eviction, if the tenant has closed business operations for 30 consecutive or 90 consecutive days without giving any valid reasons.
In all of the above cases, the landlord has to notify the tenant through the Notary Public or by registered mail.
What should a tenant do if their landlord is forcing them to evict before the end of the contract?
If a tenant in Dubai is facing unlawful eviction by their landlord, the tenant must first approach the landlord and try to negotiate the issue. If the tenant is unable to come to a resolution, with the landlord, the tenant has the right to file a complaint against the at the Dubai Rent Dispute Settlement Centre (RDSC). While filing a rental dispute case in Dubai, tenants should ensure they have all the valid documents of their tenancy contract or Ejari Dubai, latest DEWA bill, title deed copy, tenant’s passport and visa copy. Additionally, they should have Emirates ID copy and any other supporting documents before approaching the RDSC.
What can tenants do if they are unable to pay rents due to pay cuts and wish to terminate their rental agreement early or amend it to a shorter lease?
If a tenant is facing financial hardship and is unable to pay the rent, the first step would be to approach the landlord, inform them about the predicament and attempt to negotiate a deal that’s mutually agreeable between both parties. Providing supporting documents such as a copy of the termination letter/pay cuts issued by your employer can help substantiate the claim of early termination of the lease clause. If the landlord is unwilling to negotiate, the tenant can contact the RDSC on 800-4488 to request for advice.
Should tenants hire legal counsel if they wish to cancel their tenancy contract early?
If a tenant wishes to break the lease agreement early, it is not necessary to hire legal counsel. However, if the tenant wishes to do so, it is important to hire an experienced real estate lawyer who has experience handling cases related to tenancy agreements.
And that concludes MyBayut’s guide to early termination of tenancy contract in Dubai. It’s essential to be aware of the rules and rights of tenants before renting a property in Dubai. We also recommend reading up on the Dubai Land Department (DLD), which is the government authority for all matters concerning real estate in the emirate. You can also learn more about the Real Estate Regulatory Agency (RERA), the branch of DLD that regulates and registers rental agreements in Dubai.
Want to know how much your rent might increase by next year? Residents can use the RERA calculator free of charge to find out whether their property is applicable for a rent increase!
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