New Sharjah Rental Law: What You Must Know

Sharjah recently established a new rental law effective for strengthening tenant protections and defining the rights of the landlords. H.H. Dr. Sheikh Sultan bin Muhammad Al Qasimi, Supreme Council Member and Ruler of Sharjah, has issued Law No. (5) of 2024 on Property Leasing in the Emirate of Sharjah. The new tenancy law outlines specific conditions under which a tenant can be asked to vacate a property or the contract be terminated. The guidelines have also been set up while paying attention to concerns surrounding rent hikes and notice periods for eviction, ensuring fairness for both tenants and landlords.

Key Protections Against Eviction

Under the new law, significant protection from evictions has been given to tenants. In residential leases, under the new law, no request can be made by the landlord for the tenant to vacate the property for the initial three years into the rental contract. This protection extends to five years for commercial, industrial, or professional leases. Previously, landlords were allowed to issue a three-month eviction notice with permission from the Sharjah Municipality.

However, there are certain situations in which the law may consider eviction valid even during the period of protection. These include:

1. Failure to pay Rent: If the tenant fails to pay the rent or any installment thereof within 15 days of the due date, the landlord can notice the tenant for eviction.
2. Breach of Legal or Contractual Obligations: If the tenant violates a legal or contractual obligation, and still fails to rectify the issue within 30 days after notice is served, the landlord has the right to evict the tenant.
3. Subletting without permission: If the tenant assigns all or part of the lease contract or re-rents all or part of the leased property in violation of the provisions of this law and its executive regulations, without prejudice to the provisions of the transfer of ownership of the commercial premises stipulated by law.
4. Improper Use of Property: When the tenant uses the leased property or lets others use it for a purpose other than that which has been stated in the lease contract, or contrary to what is stipulated in the terms of the contract, and is using it for purposes contrary to public order and morals.
5. Demolition or Major Maintenance: If the landlord wishes to demolish the rented property, rebuild it, or carry out comprehensive maintenance that makes it impossible for the tenant to be present in the property, in accordance with the conditions specified in the executive regulations of this law.
6. Occupy for Residential Use: The landlord intends to occupy the rented property for residential purposes for his or any of his first-degree adult relatives, provided that:
   • He does not own another residential house in the territorial jurisdiction of the municipality.
   • He serves the tenant with notice of eviction, within a period of not less than three months from the date of eviction.
   • The lessor himself or one of his first-degree adult relatives shall occupy the leased property within two months after it has been vacated by the tenant for a period of one year without interruption.

Further, it is mentioned that if the landlord fails to comply with the conditions set forth in paragraph E of this article, the tenant shall have the right to claim compensation before the center for the damage he suffered as a result of the eviction.

Read More about Understanding the Surge in Tenant Evictions by Landlords in Dubai

Protections for Rent Payments

The law prescribes that if the landlord either refuses to accept the rent payments or does not indicate a place for payment, the tenant may deposit the rent or installment with the center designated by the decision of the minister, provided that he or she acts according to the guidelines in the law’s executive regulations. In any case where there is no agreement between the landlord and tenant on the method or date of payment, or if proving such an agreement is difficult, rent will be paid in four equal installments  throughout the lease term.

Conditions for Contract Termination

The new rental law stipulates specified conditions under which the rental agreement is to be terminated, thus benefiting both the parties involved. The essential points are as follows:

• Transfer of Ownership: For any sale or transfer of the property to a new owner, the tenant retains the lease. The new landlord must not evict the tenant and must not raise the rent except according to provisions made in the new law. This means continuity and protection for the tenant in case the property changes ownership.
• Death of the Tenant: In this case, if the tenant dies, the lease does not automatically end unless the tenant’s heirs ask for it. In such cases, the contract can only be terminated 30 days after the landlord receives notice or once the duration of the lease has expired.
• Early Termination by the Tenant: Tenants are entitled to terminate a fixed-term tenancy early if they can demonstrate that there are some exceptional or unforeseen reasons that would make it difficult for them to perform their obligations. Should the landlord fail or refuse to terminate, the tenant may appeal to the relevant authority. Upon approval of early termination, the tenant is liable to pay at least 30% of the rent for the remaining term unless both parties agree otherwise.

You should know: How Rental Dispute Lawyer Dubai UAE Help with Tenant and Landlord Disagreements

Rent Increase Regulations

The restriction on rent increases is an essential aspect of the new law. Rent cannot be increased by the landlord until three years have passed from the beginning of the rental agreement, unless both parties mutually agree to a change. If a tenant accepts the rent increase during this period, the landlord cannot increase the rent again for a period of two years thereafter. Again, it states that any rent increase made should be calculated considering the fair rent value as determined by the executive regulations of the law. It ensures that the increases in rent are rational and within the market scale.

Mutual Agreement for Rent Increase

If the tenant agrees to this increase during the first three-year period, the landlord must wait two more years before proposing another increase. This clause therefore encourages mutual understanding and cooperation between landlords and tenants while at the same time protecting the tenants from frequent and unpredictable increases in their rent. The governing council retains the right to amend these time frames through formal decisions, thus allowing flexibility and responsiveness to change in market conditions.

Know more about Property Disputes for Tenancy Contracts in Dubai

How HHS Dubai Lawyers Can Assist

Understanding the new rental laws in Sharjah can be a difficult thing, especially when it involves new regulations that tie the interest of tenants and the landlords. In case you are a tenant looking to be protected under the new Sharjah rental law, or a landlord seeking guidance on how to start an eviction process or procedure followed in raising rent, HHS Lawyers in Dubai is here to help you out. Let the experienced team of lawyers guide you in understanding your rights and obligations such that your rental agreements stand compliant with the latest regulation.

Contact us today for professional legal advice tailored to your individual circumstances.