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Abu Dhabi, UAESaturday 23 June 2018

Homefront: DIFC investment banker must pay nine months' rent after quitting job

The Dubai resident plans to leave the UAE and is only three months into a 12-month tenancy contract

DIFC and Startupbootcamp will focus on guidance and mentorship to support qualifying early stage startups. Sarah Dea / The National
DIFC and Startupbootcamp will focus on guidance and mentorship to support qualifying early stage startups. Sarah Dea / The National

I am an investment banker and recently resigned from my job in Dubai International Financial Centre. I signed a lease agreement for a year, and now three months into the contract, I have left my job and plan to leave the UAE for good. My landlord (a property management company) refuses to cancel my remaining post-dated cheques and wants to charge me the remaining nine months' rent unless I find another tenant at the same price (which is impossible because I leased it overpriced). I do not want my cheques to bounce nor end up with a legal case against me. What are my options? AS, Dubai

There is no provision for this as per Dubai government rules, therefore the contract has to be adhered to. Unless there is a clause that specifically states what would happen in the event of breaking or leaving the contract early, then you could find yourself out of pocket.

Despite the fact that there is no government ruling, the industry practice does allow for tenants to break the contract early but in doing so there is a penalty of between one to two months' rent. This is as per written agreement. While this is what some parties end up doing, there is nothing in law that protects the tenant should he or she wish to leave early. It’s all about negotiating with the landlord. The other industry norm is exactly what your landlord is asking you to do and that is to find another person to take over your lease. I realise that this option may not be ideal as you need to leave and the initial rent was higher than the market rent now but if another tenant is found, you can make up the difference in rent. This will certainly be better than losing nine months' rent.

Ultimately, you signed a contract so if there is no break clause in it, then you are at the mercy of the landlord to find a solution. One always hopes that landlords would be more sympathetic to tenants' situations, but they are under no obligation to accept less rent than agreed just because the tenant wishes to leave early.

Also, there have been some rule changes in Dubai regarding bounced cheques and/or failure to pay rent. These are no longer put through the court system but instead are treated as a misdemeanour subject to financial penalties.

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My landlord has hinted he wants to sell the apartment I live in next year, which means he would be sending me an eviction notice at the end of this month when my tenancy contract is due for renewal. However, I have set plans to leave in 2020 as my work contract ends in June that year. Is it worth mentioning this to him to see if he would delay selling? Ideally, I want to avoid moving into a new home just for a year, KM, Abu Dhabi

I always advise having a frank conversation with the landlord because the relationship between the parties is of utmost importance especially if there is frequent dialogue concerning any issues to do with the property or tenancy agreement. Where possible, meet the owner, rather than have a conversation on the telephone, it is so much more personal when a face-to-face meeting is scheduled. At the meeting you can explain your point clearly and perhaps he can let you know why he maybe selling. If you are able to convince him to delay, then at least you will be secure until the time comes for you to leave. If, however, he decides he does need to sell, you can always request he allows you stay in the property until such time as a buyer is found. Perhaps the buyer turns out to be an investor and would be happy for you to stay on anyway.

Regrettably if the owner does not agree to anything other than your eviction at the end of the agreement, you would have no alternative but to seek other suitable accommodation. Moving for just one year is not deal but it is a tenants' market at the moment so I’m sure you will be able to find a great deal even with the extra expense of moving.

Mario Volpi is the sales and leasing manager at Engel & Volkers. He has worked in the property sector for 34 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