Abu Dhabi, UAETuesday 2 June 2020

Homefront: 'I've lost my job, so can my landlord charge a penalty for moving out early?'

The Ras al Khaimah resident was made redundant due to coronavirus and gave three months' notice on the property

The tenant says he should not have to pay a penalty as it is not written in his Ras al Khaimah tenancy contract. Antonie Robertson/The National
The tenant says he should not have to pay a penalty as it is not written in his Ras al Khaimah tenancy contract. Antonie Robertson/The National

I lost my job in March due to Covid-19 and gave three months' notice on my apartment, as per Ras al Khaimah's municipality regulations. I also paid three months of rent and it was accepted by the owner. I have until June 30 to vacate.

The landlord is holding a Dh1,600 deposit and a Dh16,000 cheque of mine that was postdated for future rent. I want the cheque and deposit returned when I vacate the property but the management company said they will only return it when I pay an additional two months' rent, which equates to a penalty of Dh5,333. I don’t have this money and should not have to pay as it’s not written in the RAK Municipality contract or the management company's contract. Also, due to Covid-19 circumstances, I've been advised the penalty should not apply.

I spoke with the owner directly earlier this month and he was just as rude as the management company. He showed no empathy towards my situation and just seemed to want his money. He told me he’s been to court many times and he is happy to go again as he knows the law.

The landlord then sent me an offer by email but it suited him more than me. The managing agent suggested I sublet the property, which is illegal, so I will report them officially.

The situation is so draining. I just want to move out, hand the keys back and get my deposit and cheque and go home. If they cash the cheque and it bounces I will have police issues and problems returning to the country and they know that.

I know that landlords have been urged to be flexible at this time. I don’t want to go to court and be out of pocket. It’s all too stressful, so what do you suggest I do? JE, RAK

The perpetual struggle between tenant and landlord is often fractious in normal times. Each party always tries to gain advantage over the other, however, during this difficult period, it is made more contentious. While you are right to hope for understanding and leniency, this often does not happen.

The first thing of note is the contract. If, as you say, there is no provision for a penalty for early termination, then it would be difficult for an owner to enforce this, even if this penalty is normal in other emirates, such as Dubai. Due to the current situation, you have lost your job and therefore you are not able to fulfil your part of the contract i.e. pay the rent. This reason could be regarded by a judge as being of a 'force majeure', which refers to a situation where unforeseeable circumstances prevent someone from fulfilling a contract. This, however, could also be very complicated to ascertain in law. The fact of the matter is that the management company, presumably requested by the landlord, is now looking to get compensated by you having to leave early.

Your misfortune of losing your job has now affected your landlord negatively, so requesting a two-month charge does not seem unreasonable in terms of his loss of rent. Emotions are running high at the moment and you obviously are entitled to feel like you are being hard done by, given the landlord is insisting on such compensation, especially as it does not form part of your contract.

In times like these, two parties have to try to find a win-win position, so, as a suggestion and given you have a bit of time before you need to vacate, I advise you try to find a replacement tenant. Subleasing is not allowed, however, if the landlord is aware and has agreed to it in writing, it is then perfectly acceptable.

By finding a replacement tenant, the landlord has any loss of rent covered and you will get your deposit and rent cheque back too. The alternative of just 'digging your heels in' and not moving from either of your positions will end in litigation for both parties which only serves to lose time and money.

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

Updated: April 30, 2020 08:10 AM

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