Our property expert Mario Volpi helps two landlords in a quandary over renting their properties out.
Homefront: advice for first-time Dubai property owner
I’m a first-time property owner in Dubai and already finding myself dealing with tenant issues (I want to move in as soon as possible and the tenant wants to stay). I’ve asked around for help and everyone I ask – even the RERA agents – gives me different answers. Here are the facts: the property, which is furnished, is occupied by a tenant who in July 2013 signed a “one-year only”, “non- negotiable” Ejari-registered contract that can only be renewed “at the discretion of the landlord”. When my offer was accepted a few weeks ago by the owner, he immediately presented her with a 12-month eviction notice, as per RERA guidelines and the rental agent’s advice. To make it easier for the tenant to move out (my lease where I currently reside expires in March and I would like to move in to my new place by then), I offered the tenant incentives such as if she leaves before March, she could take the furniture with her. Now, she’s saying she wants to stay for the full 12 months, which means come July 2014 when her contract expires, she would like to renew for an additional six months. My question: am I obliged to renew her contract in July or can I cite the “non-negotiable” and “renewal at the discretion of the landlord” as grounds not to renew? MZ, Dubai
The tenant signed a contract that states;
a) One year only
c) Can only be renewed at the discretion of the landlord.
All these three points are not recognised by the law. All tenancies have to be registered at Ejari and any disputes can only be heard at the rent committee if they are registered. The cost is 3.5 per cent of the rental amount.
According to the information you have provided, the best case scenario for you would be that the law recognises the eviction of the tenant 12 months after she has received the statutory notice, ie 12 months after you purchased the property and the previous owner sent an eviction notice.
If you can negotiate or convince the tenant to leave earlier (such as March as per your request), then this is down to pure negotiating but the law states that she would not need to leave before the eviction period is complete which is at the end of 2014.
You are not obliged to renew her contract after that date as she would have had the required notice period to vacate as you wish to move in yourself.
I have a one-bedroom apartment in Downtown Dubai which was just handed over. Currently I wish to lease it out for a year. My concern is that I may need to sell the apartment in August, as I may – if the situation demands – need the funds to invest into my business. I would like to know if I can lease it out for one year with a non-renewal clause at the end of the tenancy contract. Am I allowed to sell the property in August/September if the buyer who purchases it is ready to continue the lease with the existing tenant until its expiry at the end of the year. TR, Dubai
You are at liberty to sell your property at any time, whether you have a tenant in situ or not. If you wish to sell then go ahead and use a reputable RERA-registered company, inform the tenant of your intentions as you will need cooperation for viewings etc. After a buyer is found, you will need to give your tenant the statutory 12 months’ notice to vacate the property. This needs to be in writing and notarised or sent via registered post (preferably both). If a buyer wishes to move in, they will have to wait for this notice period to expire before taking possession of the property. If the buyer is an investor, they will simply become the new landlord and the tenant can stay on if so required.
Mario Volpi is the managing director of Prestige Real Estate in Dubai (prestigedubai.com). He has 30 years’ of property industry experience in the emirate and London. Send any questions to email@example.com.