Changes to eviction notices put Dubai tenants on alert

Changes to eviction notices put Dubai tenants on alert

05 February 2024, The National UAE

Eviction notices in Dubai may now be transferable between owners, with recent cases tested in rental disputes favouring landlords trying to offload properties with sitting tenants.

A recent court decision noted by the Dubai Rental Dispute Centre (RDC) concluded an eviction notice was transferable from a property seller to the new buyer.

Previously, new owners buying properties with a sitting tenant were required to apply for a new 12-month eviction notice, even if a notice had already been served to a tenant via a public notary.

This opened the door to a tenant being able to serve, for example, 11 months of an eviction notice, only to have an extra 12-month eviction notice added on if the property was sold to a new buyer.

But, even though article 25 of law 33 of 2008 on eviction notices remains the same, the way it is interpreted in court has changed so the notice is attached to the property and both parties are protected.

Ludmila Yamalova, managing partner at law firm HPL Yamalova and Plewka, said the new interpretation provides stability.

“In late summer of 2023 we saw the first case at the RDC that applied a different interpretation [to evictions],” she said.

“Since then, there have been at least 10 cases where the eviction notice ultimately is attached to the property and not limited to the party that serves it.

“You want to be able to provide some sort of stability, but you don’t want to restrict investors to the extent that it makes no sense for them to own property.

“If you truly are an investor, if you want to make money, you do have that option of a 12-month notice to dispose of the property.

“You can rely on that notice so everybody’s protected. It strikes the right balance.”

A landlord can terminate the contract if the eviction notice is properly served through the notary public, at least 12 months in advance.

Any judgment made in the RDC is open to appeal and is not always used as precedent for similar cases in the future.

In the current booming housing market with soaring rents, Dubai tenants and landlords have been at loggerheads.

Dubai Land Department and the Real Estate Regulatory Agency have clear guidelines protecting tenants from unscrupulous landlords while also protecting a buoyant property market.

“The law reads in such a way that every regular relationship automatically renews on the same terms and conditions unless there’s a breach or a violation of the law, or if the parties want to sell the property or move in,” Ms Yamalova added.

“If that’s the premise, then this is why the eviction notice is so important.

“It’s only relevant because the rental contract is considered to be continuous until either party wants to go their separate way amicably, or if there’s a breach, a court order or eviction notice.”

Rent restrictions

By law, landlords are only allowed to increase rent in line with a government index taking into account the average rent paid for similar properties.

The rules apply only in Dubai, because each emirate has its own property market regulations.

The DLD rental index is an online calculator allowing tenants to check current market rates.

If the existing rent is 10 per cent less than the average rent paid for similar properties in the same area, rent cannot be increased.

If it is less than 11 per centto 20 per cent, rent can be increased by a maximum 5 per cent, and 10 per cent if the tenant is paying 21 per cent to 30 per cent below the market rate.

Landlords must give a 90-day notice to tenants of any contractual changes, including the amount of annual rent paid.

If a landlord increases rent outside the rental index, or issues an eviction notice outside the permitted reasons, tenants can object to the move via the RDC.

Dr Hassan Elhais, a legal consultant at Awatif Mohammad Shoqi Advocates & Legal Consultancy, said eviction terms were clear.

“There are specific reasons why the landlord may request eviction after the expiry of the lease contract,” he said.

“These include reconstruction of the property, restoration that cannot be done during the tenant’s continuous occupation, personal use by the landlord or their first-degree relatives, or sale of the property.

“In this scenario, the notice should be served for at least 12 months before the eviction date through notary public or registered mail.

“The validity of the notice may be contested by the tenant if the notice was not duly served through notary public or registered mail, if the minimum notice period was not given, or the reasons mentioned in the notice were either not valid reasons acceptable in the law, or were false.”

Buyer’s market

Property experts say more people in Dubai are looking to buy their own home, to avoid clashes with landlords.

In the first nine months of 2023, Dubai recorded 116,116 new property transactions, worth more than Dh429.6 billion ($117 billion), a 12-month increase in transactions of almost 40 per cent.

“The UAE rental laws are not set on precedent and it is 100 per cent up to the judge of the day, depending on the case. Occasionally you can have two identical cases with different outcomes,” said Mario Volpi, a sales director at AX Capital real estate in Dubai.

“The market is definitely moving towards a lot more end users, but we still have a lot of investors.

“When the buyer is an investor, that person cannot get the tenant out, because you cannot evict someone in order to re-let it.

“If you’re buying something with a tenant in situ, it is extremely difficult to get the current tenant out in order to re-let. That’s not allowed.

“But when the buyer is an end user and needs to move in, this is a step in the right direction for those buyers and re-addresses the marketplace balance.

“If people are having episodes with their landlords, it makes them keener to buy.”

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