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Lease Renewal Disputes in Dubai: A Comprehensive Guide

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Lease renewal disputes in Dubai can be complex, involving multiple regulations and legal requirements. This guide provides a comprehensive overview of the legal framework, common issues, and steps both landlords and tenants can take to protect their interests.

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Legal Framework in Dubai

1. Dubai Rental Law:
   • Governed by Law No. 26 of 2007 and its amendments by Law No. 33 of 2008.
   • Regulates the relationship between landlords and tenants.
2. RERA Guidelines:
   • The Real Estate Regulatory Agency (RERA) provides guidelines for rent increases, renewal notices, and dispute resolution.
   • Rent Increase: Must comply with RERA’s rent increase calculator.
   • Notice Requirement: Landlords must provide 90 days' notice before implementing a rent increase.

Legal Rent Increases

According to RERA, legal rent increases depend on the current market rent value and the difference between this value and the existing rent:

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• No increase if the current rent is less than 10% below market value.
• Up to 5% increase if the current rent is 11-20% below market value.
• Up to 10% increase if the current rent is 21-30% below market value.
• Up to 15% increase if the current rent is 31-40% below market value.
• Up to 20% increase if the current rent is more than 40% below market value.

RERA Rent Increase Calculator: RERA Rental Increase Calculator

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Common Issues in Lease Renewal

1. Incorrect Contact Details:
   • It's essential for both parties to keep contact details updated to avoid missed communications.
   • Update Personal Information: Tenants should update their details with their landlord or property management and also through Dubai REST app.
2. Disputed Rent Increases:
   • Landlords must follow RERA guidelines for rent increases. Any increase not compliant with these guidelines can be disputed.
3. Administrative Fees and Fines:
   • Lawful Administrative Fees: Fees that are typically allowed include charges for processing lease renewals, maintenance fees, and service charges. These fees must be clearly outlined in the lease agreement.
   • Lawful Fines: Fines can be imposed for breaches of the lease agreement, such as late payment of rent or unauthorized modifications to the property. These fines must be reasonable, clearly defined in the lease agreement, and comply with local regulations.
4. Unlawful Fines:
   • Excessive Late Payment Fees: Charging a fee higher than what is outlined in the lease or what is considered reasonable by law.
   • Unapproved Modifications Penalties: Fining tenants for modifications that were not specified as prohibited in the lease agreement.
   • Arbitrary Fines: Imposing fines for actions that are not breaches of the lease agreement or not supported by law.

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Eviction Notices and Legal Grounds

1. Grounds for Eviction:
   • Sale of the Property: The landlord must provide a 12-month notice via a notary public or registered mail if they intend to sell the property.
   • Personal Use: The landlord or their immediate family must need the property for personal use, and a 12-month notice is also required.
   • Property Demolition: The property requires demolition for reconstruction or significant renovations that prevent occupancy.
   • Non-Payment of Rent: The tenant fails to pay rent within 30 days of receiving a written notice from the landlord.
   • Breach of Lease Terms: The tenant violates the lease terms and does not rectify the breach within 30 days of being notified.
   • Illegal Use: The tenant uses the property for illegal or unauthorized purposes.
   • Property Damage: The tenant causes significant damage to the property.
   • Safety and Health Hazards: The property is deemed unsafe or uninhabitable by competent authorities.
2. Changing Reasons for Eviction:
   • If a landlord initially gives a notice for sale and later changes the reason to personal use, this can be contentious. Tenants can dispute this change at the Dubai Rental Dispute Center (RDC) if they believe the landlord is acting in bad faith.

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Steps for Tenants

1. Review the Lease Agreement:
   • Ensure you understand all terms, including notice periods, rent increases, and penalties.
2. Update Contact Details:
   • Always keep your contact information current with your landlord or property management.
3. Respond Promptly:
   • Address renewal notices and any communication from the landlord promptly to avoid misunderstandings.
4. File a Complaint with RERA:
   • If there are disputes, file a complaint with the Dubai Rental Dispute Center. They provide mediation and adjudication services.

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Steps for Landlords

1. Adhere to Legal Requirements:
   • Follow RERA guidelines for rent increases and provide the required notice periods.
2. Clear Communication:
   • Ensure all communications, especially regarding renewals and rent increases, are clear and documented.
3. Keep Records:
   • Maintain detailed records of all transactions and communications with tenants.

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Addressing Specific Disputes

Example Scenario: A tenant receives a legal notice after failing to renew their lease due to missed communications and is now facing increased rent and fines.

1. Verify Claims:
   • Check the validity of the rent increase and the fine against the lease agreement and RERA guidelines.
2. Dispute Resolution:
   • File a complaint with the Dubai Rental Dispute Center if there are discrepancies or if the landlord did not follow legal procedures.
3. Seek Legal Advice:
   • Consult with a real estate lawyer to explore your options and ensure your rights are protected.

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Conclusion

Understanding the legal framework and your rights and responsibilities as a landlord or tenant in Dubai is crucial to preventing and resolving lease renewal disputes. By adhering to RERA guidelines, maintaining clear communication, and seeking legal recourse when necessary, both parties can ensure a fair and lawful resolution to any issues that arise.

For more information or legal assistance regarding workplace policies and your rights as an employee in the UAE, contact a qualified legal professional.

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Sources:

• Dubai Rental Law
• RERA Rental Increase Calculator
• Dubai Rental Dispute Center

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If you need further assistance, our team at Fawzia Mohd Law is here to help you navigate these complexities and protect your rights.

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