Question: I signed a memorandum of understanding on March 4 for the purchase of a property at Gate Tower, Abu Dhabi. The original agreement was valid for 60 days. However, due to delays in the bank loan process, the seller decided to withdraw from the sale.
About a week later, the seller reconsidered and agreed to proceed with the sale. We did not sign a new memorandum of understanding, as advised by the agent handling the transaction.
Now, as we are already into the third week of June, certain pending actions remain from the seller and the agent holding the power of attorney.
Could you advise what steps I can take to help move the process forward, as the delay is becoming longer than anticipated?
My blank cheque as security deposit of 10 per cent of the property price is with the agent. AA, Abu Dhabi
Answer: The first thing to point out is that not signing a new written agreement was a bad move because now you are reliant on a verbal agreement, where the parties don’t have any legal redress should they fail to fulfil the wishes of all.
These delays would worry me because the tide has turned from your side being the one that had issues leading to delays, but now the delay is with the seller. If all parties are in agreement and even at this late stage, I would still urge you to firstly sign an addendum to the expired memorandum of understanding clearly stating the obligations of all parties in order to finalise this sale, after which all parties can work to finish this transaction, assuming all still wish to do so.
This is where my concerns are. It’s possible that the seller may use this delay to look for another buyer or indeed has one already but just has not informed you yet. I know this is pure speculation, but my experience has shown me that when the seller delays, especially in a rising market, it’s because he wants a better deal.
I suggest you bring all parties together to agree once and for all if this deal is going ahead because with an expired memorandum of understanding in hand, nobody has any rights.
Q: I have a question regarding an office rental situation. If I provide a tenant with a 12-month eviction notice due to the sale of the property, and after the tenant vacates, I later invite them to return but they decline, would I be legally allowed to rent the office to someone else?
I recently purchased an office property and understand that the previous owner issued a 12-month eviction notice to the tenant due to the sale of the property. I assume that this eviction notice remains valid under my ownership, just as the lease contract would. Could you confirm if this is correct?
Additionally, as the new owner, once the tenant vacates the property, am I permitted to lease it to a new tenant immediately? JL, Dubai
A: The outgoing tenant always has the first right of refusal after a forced eviction, so if you re-offer the unit to the outgoing tenant and they are not interested to return, you would need to have this in writing, preferably notarised, after which you can re-let the property again.
The reason of the notarised notice is because a landlord technically cannot evict one tenant to then just re-let it out to another. That’s why the outgoing tenant has the right of refusal and if they do not exercise that right, you can move forward and re-let the property immediately.
Your second point is correct, as long as the eviction notice was sent by notary public and/or registered mail and was for the statutory 12 months’ notice, you can use this for your own gain, even if it was sent by the previous owner.
This has now been made possible by judges at the Rental Dispute Settlement Committee agreeing that the notice served is transferable when previously it wasn’t. Before this law change, you would have had to serve another 12 months’ eviction notice to the tenant yourself.
The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to mario@novviproperties.com
