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Renting and leasing in Dubai

Renting and Leasing in Dubai

I. Introduction

Renting and leasing properties in Dubai are common among both locals and expatriates, offering a wide spectrum of accommodation choices, from upscale apartments to expansive villas and commercial spaces. Typically, tenants and landlords enter into lease agreements outlining occupancy terms, duration, and conditions. Rental prices vary based on factors like location, size, and amenities, typically paid annually or biannually. Oversight of Dubai’s rental market falls under the Real Estate Regulatory Agency (RERA), ensuring equitable dealings between landlords and tenants. RERA Dubai operates as a regulatory division under Dubai’s Department of Land and Property, established by H.H. Sheikh Mohammed Bin Rashid Al Maktoum, offering a transparent and functional legal structure for all involved in Dubai’s real estate sector.

Furthermore, it is crucial to adhere to the regulations delineated in Law No. 26 of 2007, which governs the relationship between landlords and tenants in the emirate, as well as Law No. 33 of 2008, an amendment to Law No. 26 of 2007 (referred to as the “Dubai Tenancy Law”). Moreover, it governs the relationship between lessors and lessees of properties within the Emirate, establishing legal guidelines for property renting and leasing. The rights and obligations of both landlords and tenants are specified in this statute, as are the provisions governing subleasing.

II. Landlord’s rights and obligations

  • Landlord’s rights

The landlord reserves the right to evict in specific scenarios outlined in Article 25 of the DTL. Here, a landlord can demand eviction of a tenant before the expiry of the tenancy period. These scenarios include failure to pay rent within 30 days of notification (Article 25.1.a), subleasing the premises without written approval (Article 25.1.b), using the premises for illegal or immoral activities (Article 25.1.c), causing irreparable damage or endangering the safety of the property due to negligence or deliberate actions (Article 25.1.d), using the premises in violation of contractual or regulatory purposes (Article 25.1.e), demonstrating evidence of collapse danger validated by a technical report from Dubai Municipality (Article 25.1.f), or failing to comply with legal obligations or contract conditions within thirty days of notification (Article 25.1.g). In such cases, the landlord reserves the right to seek eviction based on the violation committed by the tenant.

  • Landlord’s obligations

According to the DTL, the responsibilities of a landlord are delineated across multiple Articles. Article 15 stipulates that the landlord is obligated to deliver the premises in a condition that allows the tenant to fully utilize the contracted benefits. Throughout the tenancy period, Article 16 holds the landlord responsible for maintaining the property and rectifying any defects that impede the tenant’s intended use, unless mutually agreed upon otherwise. Additionally, Article 17 emphasizes the landlord’s responsibility to refrain from making alterations that may impact the tenant’s use of the property, holding them accountable for any changes, damages, or shortages unrelated to tenant actions. Furthermore, Article 18 necessitates that the landlord furnish the tenant with all necessary approvals from authorities in Dubai if the tenant desires to carry out any decoration or works that require such permissions. These provisions collectively ensure that the landlord fulfils their obligations in delivering, maintaining, and safeguarding the property for the tenant’s intended use.

III. Tenant’s rights and obligations

  • Tenant’s rights

Under the DTL, the tenant has the right to lease a property that is in good condition, allowing them to fully enjoy all the benefits specified in the contract. Furthermore, they’re entitled to prompt repairs for any defects in the property. Article 7 emphasises that unless both parties mutually agree or as per the provisions of this law, a valid tenancy contract cannot be unilaterally terminated by either the landlord or the tenant. Concerning rent value as per Article 9, it’s required that both the landlord and tenant clearly state the rent value in the tenancy contract. They are not permitted to increase this rent value or change any terms of the contract for the initial two years from the start of the original tenancy relationship. This rule acts as a safeguard, ensuring that neither party can make sudden alterations to the rent or terms of the agreement during this crucial early period of the lease. It aims to provide stability and consistency in the rental arrangement during the initial phase of the tenancy. After the passage of two years, Article 10 specifies that RERA will establish standards to define the rates of rental increases in the Emirate, aligning with the overall economic circumstances prevailing in the area.

  • Tenant’s obligations

The DTL Article 19 mandates timely payment of rent and requires tenants to maintain the premises akin to their property. Any alterations or maintenance work necessitates the landlord’s permission, alongside approvals from relevant authorities, except for routine maintenance or alterations typically conducted by tenants. Additionally, Article 20 allows landlords to secure a maintenance deposit, refundable at the contract’s end, for ensuring premises upkeep. Article 21 emphasizes the tenant’s responsibility to return the property in its original condition, barring normal wear and tear or uncontrollable factors, with dispute resolutions directed to the Committee. Moreover, Article 22 obliges tenants to settle government fees, subleasing dues, and any other applicable taxes. Notably, Article 23 restricts tenants from removing fixed improvements upon eviction unless agreed upon mutually. Lastly, Article 24 underlines the necessity of landlord consent for subleasing or assigning benefits, unless otherwise stipulated in the tenancy agreement. These Articles collectively outline the tenant’s financial, maintenance, and contractual responsibilities, fostering a harmonious landlord-tenant relationship within Dubai’s leasing framework.

IV. Subletting in Dubai

  • Definition and scope of subletting

In Dubai, subletting is the practice of a tenant renting out a portion or all of the property they lease from the landlord to another individual or company known as the subtenant for a set length of time. This arrangement often entails the exchange of the right to use the space or property for a predetermined rent. Subletting scenarios range from renting a single room within the leased premises to leasing the entire property to another party. The permissibility and conditions for subletting, on the other hand, can be subject to particular clauses detailed in the tenancy contract or governed by local laws and regulations, to define the dimensions, constraints, and legal obligations connected with such arrangements.

The DTL establishes a clear framework by defining and outlining its scope of implementation. In Article 2, essential terms integral to understanding the law’s application are articulated. Here, the Emirate, specifically identified as Dubai, and the Real Estate Regulatory Agency (Agency) are key focal points. ‘Real Estate’ denotes immovable properties utilized for various purposes, spanning residential, commercial, or professional uses. The ‘Tenancy Contract’ signifies the landlord’s commitment to grant specified property rights to the tenant for an agreed period and compensation. Defining the ‘Landlord’ encompasses individuals or entities holding legal authority over the property, extending even to representatives or authorized tenants capable of subleasing. Similarly, the ‘Subtenant’ refers to entities benefiting under a formal tenancy agreement. ‘Rent’ pertains to the agreed compensation detailed in the contract. The law also establishes a ‘Committee’ dedicated to resolving disputes and outlines clear procedures for official ‘Notification’ between parties. Additionally, Article 3 extends the law’s jurisdiction to leased properties within Dubai, while excluding hotels and employer-provided accommodations. This comprehensive delineation provides a lucid understanding of the law’s terms and its territorial applicability within Dubai’s real estate domain.

  • Importance of understanding subletting laws

Understanding subletting legislation in Dubai is critical for both landlords and tenants. Understanding these regulations ensures adherence to legal requirements and eliminates potential breaches of their tenancy contract for renters. It enables them to generate additional money by subletting portions of their leased property while adhering to all applicable requirements. Understanding these regulations is critical for landlords to protect their property rights and keep control over who occupies their premises, preventing unauthorised subletting or misuse of the rented space. Understanding these regulations aids in the resolution of disputes, defines obligations, and provides transparency in subletting agreements, eventually building a pleasant relationship between landlords and tenants while maintaining legal compliance in the Dubai real estate market.

V. Legal Framework of Subletting in Dubai

Within Dubai, tenants must not sublet their rented premises without securing written consent from the landlord, as mandated in Article 24 of the DTL. This particular Article explicitly states that “Unless agreed otherwise in the lease contract, the tenant cannot sublease or assign the use of the property to third parties without obtaining written consent from the landlord.” 

Additionally, Article 25 (1) (b) of the Amended DTL empowers a landlord to evict a tenant who sublets the premises without obtaining written approval. The Article specifies, “A landlord may request eviction of the tenant from the Real Property before the expiry of the Lease Contract only in the following cases: 

  • b. “Where the tenant sublets the real property or any part thereof without obtaining the landlord’s written approval, in which case the eviction shall apply to the tenant and to the subtenant, who shall reserve the right to claim compensation from the tenant.” 

In light of these legal guidelines, it’s recommended to obtain the landlord’s permission before renting an apartment for shared occupancy. Should the landlord grant approval, you can proceed by requesting a formal consent document that explicitly identifies and includes the personal information of all intended occupants. Furthermore, it’s plausible to propose incorporating the names of all occupants, including yourself, into the tenancy agreement as co-tenants. However, it’s essential to recognize that the landlord holds complete discretion in permitting shared living arrangements. 

VI. Conclusion

The regulations governing subletting in Dubai are essential for both landlords and tenants to understand, serving as a guideline for legal compliance and harmonious interactions. Dubai’s Tenancy Law precisely defines terms and specifies its jurisdiction within the Emirate’s real estate domain. It emphasizes the need for landlord consent before subletting, ensuring formalized agreements for shared living situations. These laws outline the rights and duties of landlords and tenants: landlords can seek eviction in certain situations while being responsible for property maintenance, and tenants have rights to ensure a habitable property and stability in rent value during the lease’s initial phase. These regulations aim to promote fair and clear relationships between landlords and tenants, fostering compliance and equity within Dubai’s real estate market. 

Amina El-Sherbiny Nabhan