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rental dispute

Role of the Rental Disputes Settlement Centre in the Emirate of Dubai

The Dubai government has made every effort to build the legislative system in the Emirate of Dubai. The landlord and the tenant relationship is crucial to Emirate law because this aspect is critical to both societal and commercial stability. 

Under the directives of His Highness Sheik Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the United Arab Emirates and Ruler of Dubai, Decree No. 26 of 2013 was issued. That was a big leap forward in regulating the relationship between lessor and lessee. The decree also established a judicial committee on the relationship between lessor and lessee. The centre has played a significant role in the stability of rents in the Emirate of Dubai. The centre is keen to regulate the issue of rent increases and limit the disturbances that used to prevail between the landlord and the tenant. It had a positive impact on the parties of the rental relationship on the one hand and the Emirate’s economy on the other hand. 

The center’s role has grown since the coronavirus pandemic in the Emirates. It has resolved hundreds of thousands of disputes, especially commercial ones, and fixed them objectively and quickly, as the circumstance requires speed and consideration of the economic and commercial aspects. In residential disputes, the centre has refrained from asking the tenants to evacuate, considering the conditions of tenants, many of whom lost their jobs due to the pandemic. The centre has proved beyond doubt its competence in dealing with the pandemic crisis on the one hand and its importance as a government facility that works in harmony with the government’s directives. The Dubai government’s plans in general and particularly its management of the coronavirus crisis in a way has amazed the world.

On the other hand, the centre has started to provide services to dealers online, and the lessor or lessee can record the rental case in a few minutes. Its sessions are held remotely online, and parties to the dispute present their papers and requests online. Most importantly, the centre has a class of experienced and qualified judges. Most importantly, the capacity, patience, and good hearings of litigants, and many of them speak English. 

All these bright ideas aimed at developing this great country and the generously and systematically harnessed possibilities, experiences and competencies that work to implement this critical legal development have been directly reflected in the relationship between the lessor and the lessee. They are the two main parties around which all this great effort is centred. Since both parties seek to preserve the lessor’s in-kind and financial rights, and the right to benefit from the lessee, they must regulate their dealings by adhering to the procedural and substantive 

Legal rules that govern the centre’s work and serve as the foundation for its decisions and judicial decisions.

The law and regulation of the two parties’ relationship guarantee rights and duties

One of the essential features of the lease agreement is stated in the text of Article (7). If the lease contract is legitimate, it cannot be cancelled unilaterally by the lessor or lessee during the contract period, save with mutual agreement or following the terms of this legislation). The content of Article (7) states that the parties must respect the contract as a principle. One of them may not terminate the contract of his own free will, i.e. his own will and decision may not dictate to the other party to terminate the contract except with the consent of both parties, and this principle is well established and strong.

– The law excluded the death of one of the parties as a reason for terminating the lease contract. The law permitted the contractual relationship to continue with its full obligations with the heirs of the deceased. Still, suppose the deceased was the leased party. In such a circumstance, they have the legal right to cancel the contract at any time, as long as the lessor is informed 30 days in advance or before the contract’s expiration date with the same mentioned duration.

– As stated in the law regulating the relationship between landlords and tenants in the Emirate of Dubai, if the landlord demolishes and rebuilds the property or renews and restores the property, the tenant has the priority right to return to this property. Transfer its ownership to another person, provided that the contract has a clear term.

Read more: How to resolve Rental Disputes: What’s the Best Way to Pay?

Articles (9,10,11,12,13) ​​included provisions for determining the rent allowance, as the two parties must observe the following:

  • The rental allowance shall be set in the lease. In all cases, the rental allowance may not be increased or any of the lease terms amended until two full years after the date of the first formation of the rental relationship. The law also gives the authority to set criteria and determine the rate of increase of rental allowances to the Real Estate Organization in the Emirate, following its general economic situation requirements. The rent allowance includes using real estate facilities such as swimming pools, sports fields, health clubs, parking lots, etc. unless the parties agree on special conditions to the contrary. Concerning the mechanism of paying the rent allowance, the tenant must pay the landlord on the dates agreed upon between them.  If there is no agreement or it is not possible to prove the payment dates, then the payment of the rent allowance shall be at the rate of four payments of equal value annually, to be paid in advance of each payment. If the parties wish to renew the lease, they may reconsider the lease allowance. Suppose they disagree on that, and it is proved necessary to extend the lease term. In that case, the committee may decide on the lease extension. Following the guidelines set out by the agency, which take into account the property’s condition and the market rental price in the region, and using those guidelines, rents will be determined following the law. In this situation, the tenant has 30 days from the date of notification to the landlord to exercise his right to return to the property.
  • The tenant must maintain the leased property. The tenant may not make changes or carry out maintenance or repair work in the property without the landlord’s permission. After obtaining the necessary licenses from the official competent authorities in the state, without prejudice to the repairs that have been agreed upon, it is customary to assign it to the tenant. 
  • The landlord has the right to collect a security deposit at the time of contract completion to assure the property’s maintenance or the tenant’s possessions, subject to the landlord’s responsibility to restore the deposit at the end of the contract term.
  • At the end of the lease term, the tenant is responsible for returning the property to the lessor in the same condition as when the contract was signed, except for damage caused by regular use or a situation beyond their reasonable control.
  • The tenant is obligated to pay all fees and taxes due on the use of the property to the relevant government departments and agencies and any taxes or fees prescribed for sub-leasing unless the lease contract requires otherwise.
  • When vacating the property and handing it over to the lessor, the tenant may not remove any fixed improvements he had added to the property unless the two parties agree otherwise.
  • The tenant may not assign the benefit of the property or sub-let it to others, except with the landlord’s written consent.

Read more: Filing a Rental Dispute Complaint at the Dubai Rental Dispute Centre

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United Arab Emirates

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M. Al Khairy, LL.B. is a Senior Partner of HHS Lawyers in UAE. Practicing law for almost a decade, he has in-depth knowledge on UAE legislation with particular expertise on legal drafting, contract drafting, labor disputes, family law, and regulatory compliance for business organizations. M. Al Khairy also provides counsel on legal rights and obligations in the UAE to clients, including individuals and businesses subject to investigation or prosecution under Criminal Law by major regulators. Read more