Changes in house rental laws likely

ABU DHABI — New federal legislation regarding civil transactions is in the pipeline. It will include modifications to the residential rental laws governing the relationship between tenants and landlords.

By Wael Yousef

Published: Sun 21 Aug 2005, 10:23 AM

Last updated: Thu 2 Apr 2015, 7:14 PM

Real estate experts are also expecting modifications to the existing laws.

They feared that the relationship between the landlord and the tenant, as part of civil transactions, was dictated by the stronger party, which means that the problem is in the application of the law and not the law itself.

An Abu Dhabi-based real estate agent explained that Law No. (2) of 1994 which regulates the relationship between landlords and tenants in the Abu Dhabi emirate stipulates in Article (12) that “The rental (of apartments) agreed upon by both parties in the rental contract shall be mandatory throughout the period of the contract.”

In the event the contract was for two years or less, the landlord shall maintain the right to increase the rent specified in the contract once every two years within the limit of 20 per cent. The two-year period, shall either, commence from the time the contract was concluded or from the date the last rent increment was effected. In all cases the landlord shall inform the tenant of his desire to increase the rent at least three months before the expiry of the contract.”

But when the tenant rejects the increase, the landlord simply abstains from renewing the contract. Now the tenant who has refused to accept the proposed increase in rent will have to look for another apartment and later be obliged to pay to the landlord the money for declining the apartment, which in most cases are high and equivalent to a year's rent.

Although it is illegal for the landlord to ask the tenant to vacate the apartment, the Department of Social Services and Commercial Buildings (DSSCB) did not do anything to address the issue. After all, the tenant would be the biggest loser, and will subsequently have to accept whimsical rent increases.

Sources in the department have affirmed that the tenant has the right to complain if the rent was increased by over 20 per cent over the actual rent every two years. They stated that some tenants had filed complaints and that the department had redressed the situation as per the laws.

But the department sometimes is not committed with the rental law in relation to raising the rental value of some residential units. Sources in the DSSCB have replied to the allegations that the “Committee for Rents” was the body responsible for correcting the value of rents after it had studied the site and specifications of the buildings, the nature of the offer and demand in the real estate market.

They said that in certain cases the rent increase superceded the 20 per cent increase stipulated by the law, and that the condition was considered a ratification of the real rental value in order to equate the rental value of similar buildings or buildings of the same type.

On the other hand, the tenant has the right to complain against any increase in the rent. The complaint is decided upon by the Committee for Rents" as per the law regulating such matters.

The sources said that “We in the DSSCB stick to the law in relation to the three months notice sent on the 20 per cent increase before the expiry of the rent contract”, adding that any tenant had the right to reach the authority concerned for arbitration in the matter, bearing in mind that the Committee shall endeavour to find a solution to the problems amicably”.

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