I live in a one-bedroom apartment Al Nahda-2, Al Qusais, Dubai. In March, there was a change in the ownership of the flat while my lease renewal was effective from April. The previous owner, not foreseeing there would be a change in the ownership of the apartment, renewed my lease in February.
The new contract increased my rent by 20 per cent. Now the new landlord says there will be a 20 per cent increase every year. We can't leave the apartment now because I gave cheques to the previous landlord and these cheques cannot be retrieved.
How can I get the cheques back? Can the new landlord increase the rent every year? The new landlord has also added a yearly maintenance charge of Dh1,000. Is that legal?
The ownership of the apartment where you reside changed in March, before the renewal of your tenancy contract, which was in April. Upon renewal of the contract, your annual rent was increased by 20 per cent and your previous landlord continues to retain the post-dated cheques you had handed over to him at the time of your tenancy contract renewal.
Your tenancy contract is subject to the provisions of Dubai's Law No 26 of 2007 Regulating Relationship Between Landlords and Tenants In the Emirate of Dubai. They are further amended by Law No 33 of 2008 (together referred to as the "Tenancy Law").
The change of the ownership of your flat shall have no effect upon your tenancy contract being renewed. It shall be carried on upon the same terms and conditions you had agreed upon with your previous landlord. This is in accordance with Article (28) of the Tenancy Law which states:
"The transfer of title to a new landlord shall not affect (the) tenant's right to continue occupation of the premises in accordance with tenancy contract signed with the previous owner, provided that tenancy contract has (a) fixed date."
Following the provision, the previous landlord has the right to encash the cheques you gave him as your rent, subject to his arrangement with the current landlord. Why do you need to retrieve the cheques from the previous landlord if the current landlord is not demanding the rent for the period when you paid the money to the previous landlord?
The current landlord is within his rights to increase the rent of the apartment, subject to Article 9 of the Tenancy Law which says:
"1. Landlord and tenant must specify rent value in the tenancy contract. If both parties have not specified the same or if it becomes impossible to prove their agreement then rent shall be as per the similar rent.
2. The committee shall specify the similar rent in accordance with the standards of specifying the rent increase percentage applied by the agency and in accordance with the general economic circumstances in the emirate, and pursuant to the property status, the similar market rent in the same area and in accordance with any valid legislation in the emirate regarding properties rent and any other factors the committee may decide."
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However, rents may not be increased beyond a certain limit which has been stipulated in accordance with provisions of Article (1) of Dubai Decree No 2 of 2011 Regarding Rentals in the Emirate of Dubai. They say:
"The maximum rent increase percentage of property units in the Emirate of Dubai leased before the enforcement of this decree shall be as follows:
a - There should not be any rent increase, if the rent for the real estate unit is up to 25 per cent below the average similar rent.
b - If the rent value was 26 to 35 per cent less than the average similar rent; the maximum rent increase shall be equal to 5 per cent of such value.
c - If the rent value was 36 to 45 per cent less than the average similar rent; the maximum rent increase shall be equal to 10 per cent of such value.
d - If the rent value was 46 to 55 per cent less than the average similar rent; the maximum rent increase shall be equal to 15 per cent of such value.
e - If the rent value was less than 55 per cent of the average similar rent; the maximum rent increase shall be equal to 20 per cent of such value."
Subsequently, the new landlord may also ask for a maintenance deposit from the tenant in order to carry out maintenance works at the premises. This is in accordance with Article (20) of the Tenancy Law which states:
"Landlord may obtain maintenance deposit amount from tenants to guarantee maintenance of premises at the end of tenancy contract, provided that landlord shall undertake to refund this deposit, or any remaining amount, upon expiry of contract."
By Ashish Mehta
This article has been amended from its original source.
