UAE’s rental law is pro-tenant
Rents: Can landlord and tenant freely agree rents in UAE?
At renewal of the tenancy contract, the landlord and the tenant were previously allowed to decide on a new rent level. However, with the new rental law in place (Decree No. 1 of 2009), rent increases for contracts renewing in 2009 were not allowed if existing rents are equal to or less than 25% of the new rental index set by the Real Estate Regulatory Agency (RERA). Where existing rent is below this threshold, rent caps apply.
NEW RENTAL LAW
|CURRENT RENTAL RATES||
|Equal to or 25% below the rental index||
|26% to 35% below the rental index||
|36% to 45% below the rental index||
|46% to 55% below the rental index||
|More than 55% below the rental index||
What rights do landlords and tenants have in UAE, especially as to duration of contract, and eviction?
- The tenant fails to pay any rent for a period of 30 days after a notification from the landlord;
- The tenant subleases the property without the landlord’s consent;
- The tenant uses the premises for illegal or immoral purposes;
- The tenant breaches the tenancy contract agreement and does not rectify the breach within 30 days’ notice from the landlord;
- The tenant uses the premises for a purpose not allowed by the tenancy contract
- The property is in danger of collapse; Even when the contract already expires, the landlord cannot evict the tenant unless one of the circumstances below is satisfied:
- The property is to be demolished or renovated (with a written approval from the municipality). However, priority should be given to the same tenant once the maintenance or renovation is over.
- The landlord wishes to recover the premises for his personal use or his next kin of first degree. In this case, the Rent Committee will not allow the landlord to rent the property for a period of one year.
In a case when a tenant continues to occupy the property after the expiry date of the contract without the landlord’s objection, then the contract will be renewed (based on the same terms and conditions) either for a similar period or for one year, whichever is less.
How effective is the UAE legal system?
The committee takes action on rent disputes only if a tenant or a landlord formally files a complaint. The complainant needs to pay 3.5% of the annual rent as a fee to the committee. If the complainant wins the case, he will be reimbursed with the amount he paid while the losing party will bear the expense.
|EVICTION FOR NON-PAYMENT OF RENT|
|Duration until completion of service of process||14|
|Duration of trial||180|
|Duration of enforcement||90|
|Total Days to Evict Tenant||285|
|Courts: The Lex Mundi Project|