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A foolproof tenancy contract

Posted by PH Real Estate on 15 May, 2018
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The standard contract guarantees their rights, but tenants need to do more to protect themselves

Last year the Dubai Land Department (DLD) announced a new tenancy contract format (standard tenancy contract), the use of which became mandatory for all short-term tenancies in Dubai, with the exception of the Dubai International Financial Centre (DIFC). While the contract is applicable in industrial, commercial and residential leasing arrangements, this article focuses on its use for short-term residential tenancies.

The introduction of the standard tenancy contract was primarily aimed at addressing the problem of a variety of contract formats being used in the local rental market, some of which contained provisions that were in conflict with Dubai Law No. 26 of 2007, as amended by Dubai Law No. 33 of 2008, or the Tenancy Law.

Some of the key changes introduced in the standard tenancy contract state that the contract is subject to the Tenancy Law and that, although the parties may agree to include additional conditions, these must not be in conflict with the Tenancy Law and any other applicable property law and regulations.

While the introduction of the standard tenancy contract is a step towards further guaranteeing the rights of both parties, there are still certain checks that a tenant should undertake from a practical and legal perspective, prior to entering into a tenancy arrangement.

Key considerations

Some of the key considerations a tenant should bear in mind include, but are not limited to, the following:

• ensure that the document is in fact the standard tenancy contract, available on the Ejari website;

• if a property has been advertised by an agent, request a copy of the agent’s identification issued by the Real Estate Regulatory Agency to confirm that the agent is a licensed broker;

• verify that the person or entity presenting itself as the landlord is authorised to grant a lease of a property to a third party by requesting a copy of the title deed and the landlord’s passport or company documents, and check that the landlord’s name appears on the title deed;

• if the landlord has appointed a representative through a power of attorney (POA), or if an agent is acting as the landlord’s authorised representative, request a copy of the representative’s passport and the POA to confirm that the representative’s name appears on it;

• carefully review and check that the POA is valid and has been attested by the local authorities, and seek legal advice to ensure that the agent is authorised to represent the landlord and grant the rights anticipated under the respective tenancy contract;

• ensure that the details of the property as stated on the title deed are accurately reflected in the tenancy contract, e.g. size, location, car parking, plot number, etc.;

• ensure that the allocation of the responsibility of the repair and maintenance for the property is stated clearly in the contract. While Article 16 of the Tenancy Law states that this is the responsibility of the landlord (unless otherwise agreed), typically, the landlord will be responsible for major or structural repairs, and the tenant will be responsible for minor repairs, and it is not unusual for the parties to agree a threshold figure, e.g. repairs above Dh500 or Dh1,000;

• with regard to the tenant’s obligation to return the property in its original condition, ensure that fair wear and tear is excepted and check if the tenant is responsible for repainting the property’s interior;

• check if the tenant is responsible for any air-conditioning consumption fees in addition to the annual rent;

• obtain personal belonging insurance and ensure that the landlord is obliged to arrange appropriate insurance coverage for the property and third-party liability;

• ensure that the entitlement and notice periods stipulated for renewal and/or termination of the contract mirror the notice periods set out in the Tenancy Law;

• check if any penalty is imposed by the landlord if a cheque submitted by the tenant is returned by the bank; typically, this amount ranges from Dh500-Dh1,000;

• ensure that cheques are written only in favour of the landlord; and

• request a copy of the Ejari certificate once the tenancy contract is registered, as any dispute between the parties will not be entertained by the rental dispute settlement centre in Dubai without evidence of valid Ejari registration.

While the standard tenancy contract is a marked improvement on the previous forms adopted in the local market, a tenant should nevertheless carefully review each contract and obtain legal advice if required, prior to entering into any tenancy arrangement.

 

Source: https://gulfnews.com/business/property/a-foolproof-tenancy-contract-1.2221808

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