Homefront: ‘Can I cancel my rental contract early without paying a penalty?’

The industry norm is for the tenant to pay the landlord one to two months’ rent as a penalty

In most rental contracts, the penalty for leaving before a tenancy period expires is one to two months’ rent. Photo: Getty Images

I want to vacate the apartment I rent in the UAE because my employer has transferred me to Saudi Arabia. However, my landlord wants me to pay two months’ rent as a penalty.

My wife lost her job, so it is difficult for my family to stay here. I want to vacate the apartment without paying the two months’ rent as penalty. Is this legally possible? SM, Dubai

In the past, there were no provisions in case a tenant wanted to cancel a rental contract early. Tenants were at the mercy of landlords to make them understand the situation and find an amicable solution. Often, landlords would hold their tenants accountable to the contract.

Today, the industry norm is for a landlord to be compensated when a tenant needs to cancel the contract early. The penalty is usually between one and two months’ rent.

In your situation, your landlord is asking what is normal in these circumstances. Having said that, if you are able to negotiate further with your landlord, this will be acceptable but remember to have an agreement in place.

It is nobody’s fault that you need to terminate the contract, but the landlord will be affected by this decision. Therefore, you need to pay them some sort of compensation.

Meet your landlord and explain your position in the hope that you can both agree on more amicable terms.

I signed a preliminary agreement to buy a property in Dubai. The current owner served a notice to the tenant on December 21 to vacate the property.

I am scheduled to complete the property transaction by January. Do I need to serve the tenant another notice or is the original notice still valid? PW, Dubai

It is quite common for judges at the Rental Dispute Settlement Committee to request a new buyer to serve their own 12-month notice

Mario Volpi,
sales and leasing manager, Engel & Volkers

In situations like this, I would recommend that you serve your own 12-month notice to vacate directly to the tenant, presumably for the reason of moving in yourself.

In theory, you shouldn’t have to do this because the seller has already served the notice. But in practice, it is quite common for judges at the Rental Dispute Settlement Committee to request a new buyer to serve their own 12-month notice.

Instead of waiting for a tenant to perhaps challenge the original notice, save some time and send your own notice as well.

We moved into a rental apartment in Sharjah in October last year and our contract is valid for one year. We lived in another apartment in Sharjah for more than 10 years and moved when it became too small for our family.

Our new landlord recently called to inform us of a viewing because he intends to sell the apartment. This was a surprise to us because we only moved in a couple of months ago and set things up in this apartment, besides paying a commission to the real estate agent.

What are my rights in case the landlord decides to sell this apartment? Am I expected to vacate the unit in October 2022 or should I be served a one-year eviction notice before the expiry of my current lease? In this case, will I be expected to vacate in October 2023? MH, Sharjah

If an owner decides to sell their rented property, the lease agreement between the landlord and tenant should not be affected under the new ownership. So, in theory, your tenancy should not be altered by the sale.

Landlords can only terminate the tenancy contract under the following circumstances:

1) If they wish to demolish the property or conduct maintenance that would require eviction.

2) If they wish to occupy the property for personal use and have no other appropriate residence.

In such cases, the rental laws in Sharjah require that the landlord must have the appropriate permits from the Sharjah Municipality and give the tenant three months’ notice.

All tenancy contracts have to be registered with the Sharjah Municipality.

If you wish to file a case, contact the Rent Regulation Department on 06-5931525 or email [e-mail].

Mario Volpi is the sales and leasing manager at Engel & Volkers. He has worked in the property sector for more than 35 years in London and Dubai. The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to [e-mail]