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Abu Dhabi, UAEWednesday 3 March 2021

Homefront: ‘Do I have to pay a penalty for not renewing my lease despite giving a month's notice?’

Although the law has done away with the need to serve notice for non-renewal, tenancy contract clauses can be legally enforced

The landlord has threatened to impose a penalty worth two months of rent despite the tenant serving the notice to vacate a month before contract expiry. Photo: Getty Images
The landlord has threatened to impose a penalty worth two months of rent despite the tenant serving the notice to vacate a month before contract expiry. Photo: Getty Images

We are a five-member family living in Dubai. Our tenancy contract expires on February 28. We sent an email to the landlord about vacating the apartment precisely 31 days before the expiry of our contract.

However, the landlord says they will charge us a penalty of two months’ rent for not notifying them 60 days prior to the expiry of the tenancy contract. The terms and conditions of our contract state that the tenant has to pay two months’ worth of rent if they fail to inform the landlord about vacating the premises 60 days prior to contract expiry.

We have been living in this building for the past three years without any lapse and have never defaulted on our rent payment. Even when we served notice to vacate, we were in ongoing verbal negotiations with the landlord about renting one of their properties for a reduced amount. We are even ready to move out of the apartment as early as on February 25 before the lease ends. What can we do in this situation? SH, Dubai

I have previously written about the notice required to be served by tenants who are not renewing their contracts. Law 33 of 2008 amended into Law 26 of 2007 is the law that governs the relationship between landlords and tenants. In the amended law, it did away with the need for a tenant to give the previously required notice to a landlord when not renewing.

I do stress, however, that if you signed a rental contract that states you require to give 60 days’ notice prior to the expiry of the contract for non-renewal, then you are legally bound by this clause and, therefore, if you do not give the required notice, you are liable for the two-month rent as penalty (in your case).

If you disagree with this penalty amount, you are at liberty to file a case at the Rental Dispute Settlement Committee in Deira, Dubai. I cannot confirm which way the judge will decide, as the law in the UAE is not set on precedent but on a case-by-case basis. The judge may rule in your favour, citing the amended Law 33 of 2008, or may decide that your rental contract (which you signed) will take precedent. Only the judge can rule on this.

I understand that you are trying to find a better apartment by negotiating with the landlord’s team, however, the two are separated.

If you disagree with this penalty amount, you are at liberty to file a case at the Rental Dispute Settlement Committee in Deira

Mario Volpi

The choice is now yours, either pay the penalty and move on or if you don’t and decide to fight the case, there are costs and time involved. In the event you win, you are likely to be awarded costs.

Perhaps, a better solution would be to try and negotiate with the landlord in order to pay only one month’s rent as penalty given you have served a one-month notice. This way, you are at least attempting to remain cordial with your landlord rather than taking him to court.

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

Published: February 18, 2021 08:00 AM

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