Abu Dhabi landlord in a tight spot with mortgage as tenant cannot afford to pay rent

Abu Dhabi landlord, whose tenant cannot afford to pay the second rental cheque, must approach the Rent Dispute Settlement Committee to solve the dispute.

Mario Volpi advises on the latest property issues. Ravindranath K / The National

I have an apartment in Abu Dhabi, which my tenant pays in two cheques. The last cheque was supposed to be collected on March 1 but the tenant asked me not to deposit it, as she did not have enough money. She did a partial payment through a transfer, and since then has not cleared the remaining outstanding (60 per cent of the second cheque). I've been extremely sympathetic, as my tenant argues that she doesn't have money. But now I've arrived at a situation where I don't have enough money to pay the mortgage. The tenant keeps making excuses and refuses to take my calls. What do you suggest? Should I start a legal process? And, if so, what steps do I need to take in Abu Dhabi? RL, Abu Dhabi

Article 23 of the tenancy law outlines the cases where landlords are entitled to request eviction of their tenant. The first case is when the tenant has not paid the rental amount during the specified period. According to Article 11 this period is 21 days as of the due date for residential and 30 days for commercial. Given that your tenant is way beyond this period, I suggest you start proceedings to get your property back.

The steps are as follows:

File a case at the Rent Dispute Settlement Committee (RDSC), which is located in Al Nahyan Complex. This is a competent authority that hears all rent disputes in Abu Dhabi. Most of the rent disputes involve evictions and rent increases.

Please be aware that if you file a rent dispute case because the tenant has not paid the rent due within the agreed date, but then the tenant settles the rent during the dispute claim the case will be automatically be dropped, allowing the tenant to stay in the leased property.

There are four stages that a dispute may go through with the RDSC. The disputing parties may choose to settle the case at any stage throughout the dispute:

• Arbitration & Reconciliation Department: This is the first stage, where the landlord and tenant convene to resolve rental disputes amicably after one of the parties files a complaint.

• Court of First Instance: This court will hear the claims brought out between the parties in a hearing format. The parties will bring forward their claims in the form of a memorandum.

• Court of Appeal: available after issuance of the judgment from the Court of First Instance. Only claims worth more than Dh100,000 can be filed here and an application for appeal must be made within 15 days of obtaining the judgment from the Court of First Instance.

• Court of Cassation: this department is for cases that are valued at more than Dh500,000. An application for the Court of Cassation must be filed within 30 days of obtaining a judgment from the Court of Appeal.

• Enforcement Department: to enforce decisions of the First Instance and Appeal Courts. This is the stage where the winning party may be able to pressure the other party to pay the adjudged amounts through various legal means.

To do all of the above, the fees and documentation required are:

• The claimant is to pay 3 per cent of the annual rent, with a maximum of Dh10,000.

• Other fees may be levied by the RDSC on the claimant for summoning experts, payment of expert’s fee, fee for deposit of rent with the RDSC and the like.

• You may have to separately pay for an advertisement announcement in a local newspaper, in case the defendant fails to show up for a committee hearing.

• The claimant will also need to submit his name with designation (either lessor, lessee, landlord or occupant) with his current address.

• The facts of the dispute must be submitted along with the original tenancy contract, notarised power of attorney (if applicable) in favour of the person authorised to represent the claimant and copies of cheques, if any, that were submitted to you.

Mario Volpi is a real estate professional who has worked in the industry for the past 31 years in London and Dubai. The opinions expressed in this article are those of the author and they do not reflect in any way those of the institutions to which he is affiliated. It does not constitute legal advice and is provided for information only. Please send any questions to [e-mail].

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