UAE property: 'Do tenants have to pay rent before signing a lease?'

The rent can be deposited with an escrow agency that would hand it over to the landlord once the contract is signed

The landlord is insisting that he will sign a new tenancy contract only if the tenant pays the rent beforehand. Getty Images

Question: A tenant unwittingly signs a tenancy contract with a property broker who had a duly notarised power of attorney from an overseas landlord.

On this basis, an Ejari certificate could not be obtained because the property broker’s residence visa is with a real estate company.

The tenant has repeatedly asked the landlord to sign a fresh tenancy contract under the same terms and conditions as the one already signed with his broker, but to no avail.

Through his broker, the overseas landlord now says he will sign a new tenancy contract only upon the prior payment of rent by the tenant.

This has led to a deadlock in the absence of any trust among the parties. Can landlords request that rent is paid before a contract is signed? AT, Dubai

Answer: I’m a bit confused because a broker can legally be a registered power of attorney, but cannot be party to the commission.

What I’m saying is that the agent cannot be both the power of attorney and agree to the let, therefore claiming the commission. He or she is either one or the other.

A landlord requesting payment before signing a contract is not that uncommon. I imagine this has been brought about due to bad experiences the landlord has had with previous tenants.

The only solution I can offer would be for the tenant or the landlord to pay for an escrow agency that would cash the rent on their behalf according to the agreement, and only hand it over to the landlord once he signs the contract in the knowledge that the rent has been paid.

Q: Can you provide me some information regarding tenants who pay rent on a monthly basis and without a tenancy agreement?

Do landlords have to follow the same rules governing yearly tenancy agreements when it comes to dealing with tenants who pay monthly rent and without contracts? I am referring to rules regarding rent increases and eviction notices.

Hence, if a tenant has lived in the same place for three or four years paying monthly rent and without an agreement, can a landlord suddenly raise the rent by 40 per cent to 50 per cent?

Otherwise, do they have to abide by the rental law rules or the Real Estate Regulatory Agency index capping a maximum 20 per cent rent increase? RH, Dubai

A: The first thing to understand is that whether or not your verbal tenancy agreement is long term or short term, it has just naturally morphed into long term.

A short-term tenancy (less than six months) does not get registered with Ejari, but a long-term one does.

Your agreement, whether the tenant pays monthly or in fewer cheques, can only be described as a long-term agreement and, for this reason, I fail to understand why there is no contract.

Despite the fact that there is no written agreement between the parties, it would be difficult to legislate what you have clearly agreed to verbally in the past.

I believe it would be the landlord's right to request a higher-than-allowed renewal rent, because the tenancy cannot follow rules that have not been put in writing, and therefore officially agreed upon.

Renting a property in this way is a potential risk for both you and the landlord because now it’s just between the two parties to agree to something.

If no agreement is found going forward, I suggest the alternative would be for the tenant to find another property to rent.

I also believe that if this arrangement has been agreeable to you over the years, the landlord should try to be reasonable for the next increase, but the tenant needs to understand that there is little to no protection if that agreement cannot be met.

Mario Volpi is the sales director at AX Capital. He has worked in the property sector for 39 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]