Homefront: ‘Should I pay three months’ rent as penalty for breaking my contract early?’

The Dubai tenant has paid a month’s rent and offered the security deposit to compensate her landlord

I used to live in the UAE but quit my job and left the country after suffering from a health problem. I terminated my UAE rent contract before returning to my home country for treatment.

But the landlord wants me to pay a penalty of three months’ rent. I paid one month’s rent and asked him to deduct the remaining penalty from my security deposit.

Since I currently don’t have a job and also suffer from health problems, I am short of money. Although I explained this to the landlord, he’s refusing to take my situation into consideration and has my rent cheques with him.

Can you advise me on what I can do? JF, Dubai

With reference to terminating a rental contract early, I would request you to read your tenancy agreement thoroughly to understand if it contains any clause that covers early termination.

If your contract has these provisions, then you must adhere to them to be released early from the agreement. However, if the contract does not have any provision for early termination, you will be at your landlord’s mercy to reach an agreement for the penalty amount.

If you are breaking the rent agreement early, the landlord is entitled to receive some form of compensation.

Your landlord is requesting a penalty amount of three months’ rent. However, this is not the industry norm. A penalty amount of one to two months’ rent is common practice within the industry now, so your landlord is being unreasonable.

Since you have already offered one month’s rent plus the deposit as compensation, this is a reasonable amount. However, you will need to get an agreement before moving on.

A penalty amount of one to two months’ rent is common practice within the industry now

Mario Volpi,
sales and leasing manager at Engel & Volkers

Try to resolve your differences and push to reach an agreement with the landlord by trying to meet face to face, if possible.

I own an apartment in an eight-storey mixed-use building in Dubai and live in it. When I and other residents moved into our units in October last year, we were told that the building was completed and the developer had a completion certificate from Dubai Municipality. They were able to transfer and register title deeds in our names.

In November, the developer started to build penthouses on the roof. The noise, disruption and damage to apartments on lower floors is significant.

When we raised a complaint, the developer and its in-house property management group told us that this is their prerogative. However, we were not sent a prior notification about the construction. What are the rules in this regard? EF, Dubai

Owners or tenants are entitled to move into a completed building only once the developer has all the correct paperwork in place. This includes approval from Dubai Municipality, Civil Defence and Dubai Land Department, among others. Utility connections such as air-conditioning and Dubai Electricity and Water Authority supply should also be in place.

If the developer starts construction activity on top of an existing building, this means it has received approval for it. Whether this approval was sought during the time of handover or was an afterthought, the developer cannot commence any work without obtaining consent from the relevant agencies.

Construction will obviously cause disruption and noise. However, there are rules that need to be adhered to. For instance, no building work can be carried out before 9am or after 6pm. But this is a small consolation, because any such work will still cause a disturbance.

If you were completely in the dark about this construction before buying your unit or at the point of handover, seek compensation directly from the developer.

The process of any compensation is likely to be long and laborious, but if you persevere you should be entitled to something because “quiet enjoyment” is a legal term attached to living in a property, whether for an owner-occupier or a tenant.

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]