UAE property: ‘My tenant is refusing to pay higher rent with one cheque’

A landlord must serve 90 days’ notice and communicate any changes to the rental contract

When it comes to rent hikes in Dubai, the Real Estate Regulatory Agency's rental calculator states what increases are allowed. Getty
Beta V.1.0 - Powered by automated translation

I am a landlord in Dubai, with a tenant living in my apartment for the past three years.

I requested for a change in the number of cheques and an increase in rent this year because the Real Estate Regulatory Agency (Rera) index has not been updated for that area in the past three years.

Rents have increased by more than by 30 per cent in this community.

However, the tenant is neither ready to move out nor agreeing to pay the rent by one cheque, as requested.

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

For any changes to a rental contract, a landlord or tenant has to communicate this to the other party, giving 90 days’ notice.

When it comes to rent increases, the Rera calculator states what increases are allowed. This is the only figure that can be used for the rent increase.

As long as the above has been adhered to, you have every right to request the one cheque payment from your tenant.

If the tenant still does not agree with the single cheque payment, you will have no alternative but to file a case against him/her at the Rental Dispute Settlement Committee (RDSC).

However, a judge from the RDSC will decide if the changes you are seeking are reasonable.

So, for example, if the tenant was paying the rent in four or six cheques, to then be asked to pay in one cheque during renewal may not seem reasonable by the judge.

As long as what you are asking is reasonable, it should be OK.

I lived in Dubai from 2007 to 2017 and then moved to the UK. I leased my property in Dubai and have been renting a home in the UK for the past five years.

Last year, I planned to sell my Dubai property and instead buy a house in the UK with the help of a mortgage.

I served my Dubai tenant 12 months’ notice to vacate last September and he moved out of the property.

However, mortgage rates have now risen to a 14-year high in the UK. I am hesitant to take out a mortgage at such a high rate.

Can I re-let my property in Dubai? In one of your previous columns for The National, I read that the previous tenant can claim compensation if the landlord re-lets the property without offering the right of refusal.

____________

Watch: the $60 million mansion — we take a look around Dubai's newest party palace

However, I haven’t able to find this clause in the rental laws of 27/2007 and 33/2008. Where can I read about this right to compensation by the previous tenant in case of non-sale of the property? SMS, UK

So far, you have done everything by the book and gained vacant possession of your property for legitimate reasons.

However, it is true that if you evict a tenant, you cannot re-let the property again for a period of two years for the purpose of earning a higher rent.

That said, there are certain procedures that need to be followed that will ensure you do not fall foul of the law.

The first thing to do is to contact your tenant to explain what happened and why you have been forced to change your mind about selling.

Offer the property back to the old tenant to ensure they are offered the right of refusal before you re-let the unit.

A tenant who has already moved out will unlikely want to go through the hassle of moving back in again.

But, you could be in trouble if you re-let the property without offering it back to the outgoing tenant.

____________

Dubai communities with the least rent increases this year — in pictures

Ensure that you get a no-objection letter from the tenant in writing. This way, you will be free to re-let the property again, given your change of circumstances.

With reference to compensation for the tenant, this is often about one year’s rent.

However, compensation is only necessary if the tenant was evicted for a false reason of either you moving in or to sell, and you did neither and with no right of refusal offered to them.

In your case, you need to offer the property back to the original tenant and at a rental rate that is not at a vacant price level.

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 mario.volpi@engelvoelkers.com

Updated: November 17, 2022, 4:00 AM
NEWSLETTERS
MORE FROM THE NATIONAL