No eviction even if you signed non-renewable rent contract in Dubai

There is good news for tenants in Dubai. You can’t be evicted that easily on the pretext that you have signed a non-renewable contract with your landlord.

Tenancy contracts issued with non-renewable clause are invalid, according to a tenant who got a decision in his favour from the Dubai rent dispute settlement centre.

The dispute centre rejected a case filed by a landlord who had given a 12-month eviction notice to a tenant, saying, “it was not a valid notice and the notice should be through public notary.”

A number of Emirates 24|7 readers have complained that several landlords, mostly corporates that own residential buildings, are issuing non-renewable rental contracts to existing tenants in order to have them evicted on contract expiry, or use the contract to increase their rents to market rates.

A company that owns a building in Discovery Gardens is issuing non-renewable contracts that include the clause to vacate the apartment on expiry of one-year contract.

“The building is owned by a company and they are forcing tenants to sign an undertaking to vacate the apartment on completion of one year rent contract,” said an aggrieved resident.

“Upon renewal they use this undertaking to blackmail tenants and ask for the rent of their choice… they don’t follow the Real Estate Regulatory Agency’s rent index,” he added.

Real estate agents confirm that it is necessary for landlords to give a 12-month notice from public notary's office.

“A lot of landlords gave non-renewable contracts as they knew that tenants were not willing to move the dispute centre. But public notary notice was always required,” said a real estate agent, who wished anonymity.

“The notary office used to send the notice directly to the tenants, but now we take the notice and send it through a courier so we get the acknowledgement receipt, which needs to be provided if the tenant does not vacate thereafter,” the agent added.

Dubai’s rent decree

In order to control the arbitrary rent increases, Dubai government released a new rent decree in December 2013. The Decree, No. 43 of 2013 now sets a specific band on how the maximum rental increases that a landlord can demand at the time of renewing leases.

The decree is applicable to private and public sector owned properties in Dubai, as well as within the free zones.

No rent increase if the rent of the property unit is less than 10 per cent of the average rent of a similar property in the same residential area

If the rent value is between 11 and 20 per cent less than the average rent of a similar property, the maximum rent increase shall be equal to 5 per cent of the rent value.

If the rental value of a unit is between 21 and 30 per cent less than the average rent of a similar unit, the maximum rent increase shall be equal to 10 per cent of the rental value

If the rental value of a property is between 31 and 40 per cent less than the average rental of a similar property, the maximum rent increase shall be equal to 15 per cent of the rental value

If the rental value of a property unit is less than 40 per cent or more of the average rent of a similar unit, the maximum rent increase applicable is of 20 per cent

The average similar rental value of the property will be determined by the Real Estate Regulatory Agency's rent index, the decree states.

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