Tenancy Contract and its rules

From March 1, 2017, the Dubai Land Department(DLD) made it mandatory for all tenants to use the Standard Tenancy Contract for all short-term rentals in Dubai. The only exception is the property leases in the DIFC (Dubai International Financial Center) which includes commercial, residential, and professional uses. This new tenancy contract endeavors to align the provisions of Law No. 26 of 2007 with the tenancy contract that the tenants and the landlords sign and regulate their relationship in Dubai. It has led to a professional and transparent property market, limited disputes between the two parties and guaranteed rights of parties to tenancy contracts. In this article, we will talk about the tenancy contract and its rules to help you understand its clauses and ensure that you consider the important factors before signing the dotted line.

The Primary Provisions of the Tenancy Contract

Earlier, there was a wide range of contract formats being used in the market. Further, some of these contained clauses which were not in sync with the Tenancy Law of Dubai (Law No. 26 of 2007 further amended by Law No. 33 of 2008 in Dubai). The new standard tenancy contract was introduced to address these discrepancies. One of the most important changes was that the new contract was made subject to the Tenancy Law. This meant that while parties could add/remove conditions to the contract, none of these conditions could conflict with the applicable laws and regulations regarding property in Dubai (including the Tenancy Law).

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There is no doubt about the fact that the new standard tenancy contract helps in guaranteeing the rights of the landlords and tenants, however, as a tenant, you must carry out certain checks before entering into a contract. This is helpful with both legal and practical purposes. Here are some important checks that you can perform:

Verifying the Contract

Do you know how the standard tenancy contract looks? If not, then visit the Ejari website and ensure that the contract that you are signing is, in fact, the standard tenancy contract. Also, once the landlord registers the tenancy contract, you should request for a copy of the Ejari Certificate. This is important because, in case of any disputes in the future, the rental dispute center in Dubai will not entertain any requests without Ejari Registration.

Verifying the Identity of the Landlord or the Agent

The RERA (Real Estate Regulatory Authority) issues a license to each agent for undertaking brokerage activity in Dubai. So, if you are renting a property advertised by an agent, ensure that you see the agent’s identification copy before entering into a contract.

Also, it is important to ascertain the identity of the entity or individual posing as the landlord of the property. The entity or person should have the authority to offer the lease of the property to a third-party. You can ask for a copy of the title deed along with the copy of the valid passport of the landlord and company documents. This will help you confirm that the name on the title deed and the official documents is the same.

In some cases, the landlord appoints a representative by registering a Power of Attorney (POA). In such cases:

  • Ensure that the Power of Attorney is valid and attested by the authorities
  • Review the contents of the Power of Attorney carefully to determine the rights conferred upon the representative. You can also seek legal help to verify if the POA authorizes the representative to grant a lease on the property as per the existing laws.
  • A representative or an agent presenting himself as the authorized representative of the landlord must be identified through his passport and POA. You must ensure that the name of the representative is the same as that on the identity documents.

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Verifying the details of the property

Before you sign the tenancy contract, you must make sure that the contract contains the property details like location, size, plot number, etc. as specified on the title deed. Also, determine the additional charges that the tenant has to bear over and above the rent like the consumption charges for air conditioning, etc.

Maintaining the Property and Repairs

The tenancy contract must clearly specify who will be responsible for maintaining the property and carrying out repairs. In the Tenancy Law, Article 16 specifies that the landlord is responsible for the repair and maintenance of the property unless both the parties agree that the tenant will be responsible for the same. Normally, the landlord assumes responsibility for all major repairs while the tenant takes care of the minor ones. Typically, the landlords and tenants differentiate between major and minor repairs based on the cost of the repairs.

Property Insurance

The landlord must provide insurance pertaining to the property and any third-party liability. The tenant should buy an insurance cover to protect his personal belongings in the house.

Also Read: Property Insurance

Renewing and Terminating a Tenancy Contract

The Tenancy Law specifies the notice period in case of renewal or termination of a tenancy contract. Before you sign the contract, make sure that the terms for renewal and termination are similar to those provided by the Law. Further, a tenant has to return the property to the landlord in its original condition. However, if you stay there for a couple of years, there will be slight wear-and-tear. Make sure that this wear-and-tear is allowed as a part of the contract. Also, check if the landlord wants you to repaint the house before handing it over to him.

Terms pertaining to payment

Usually, landlords charge a penalty if the bank returns the cheque provided by the tenant. Ensure that you are aware of the penalty amount. Further, always write cheques only in favor of the landlord.

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