Know the law: Rental laws of commercial properties

The Maysara system may be availed by only those people who have been fined for amounts equal to or more than Dh50,000.

I am writing on behalf of an ex-colleague who has been unintentionally living in the country illegally for the past three years as his company failed to renew his visa. Now, the owner of the company is missing. Can this person regularise his residency visa by paying the fine for overstaying? Will he get any concessions through the 'Maysara' system?

Pursuant to your question (as I understand it), it may be noted that the Maysara system was started by the General Directorate of Residency and Foreigners Affairs in the UAE (the "Directorate"). The system enables people convicted and fined in residency-related misdemeanours or minor offences to pay their fines in monthly installments within the maximum period of two years. However, the Maysara system may be availed by only those people who have been fined for amounts equal to or more than Dh50,000.

You have not mentioned if your ex-colleague has already been fined by the Directorate for overstaying without a valid visa. If he has already been fined, your ex-colleague may contact the Directorate to understand if he would qualify to receive the benefit of the 'Maysara' system.

However, in the event your ex-colleague has not been convicted or has not been fined as yet, he may first approach the Ministry of Labour and file a complaint against his employer and seek formal cancellation of his expired visa. Subsequently, he may contact the Directorate so as to understand the scope of his misdemeanour and the manner in which he may regularise his residency in the UAE in view of his circumstances.

Further, it may be noted that payment of overstay fines will not be enough to regularise the residency of your ex-colleague in the UAE, as subsequently he will need a fresh visa, which will allow him to continue to stay in the country.

Rental laws of commercial properties

I have rented commercial properties in Dubai, Sharjah and Ajman. Please explain the rental laws of the three emirates in light of the following questions:

1. How many days of notice should be given to the landlord?

2. Does the rental law permit the landlord to increase the rent annually?

3. Does the law permit real estate agents to charge a renewal fee of one per cent of the contract value?

Pursuant to your questions (as I understand them), it may be noted that tenancy matters in Dubai is regulated by Law Number 26 of 2007, as amended by Law Number 33 of 2008 (the "Dubai Tenancy Law"). In Sharjah, tenancy matters are regulated by Law Number 6 of 2001, as subsequently amended from time to time (the "Sharjah Rental Law"). In Ajman, such matters are regulated by Emiri Decree Number 3 2009 (the "Ajman Rental Law").

Pursuant to the first part of your question, you have asked for the stipulated notice periods in the emirates of Dubai, Sharjah and Ajman, but you have not mentioned whether you are referring to the notice period to renew the tenancy contract or notice period required to vacate. If it is for the amendment of the tenancy contract, then a notice to that effect may be served 90 days prior to the expiry of the tenancy contract. This may be noted in Article 14 of the Dubai Tenancy Law which states: "If either party of the tenancy contract wishes to amend any of its conditions pursuant to Article 13 of this Law, then he must notify the same to the other party not less than 90 days prior to expiry date, unless both parties agreed otherwise."

It may further be noted that the Sharjah Rental Law and Ajman Rental Law have a similar provision.

Pursuant to the second part of your question, it may be noted that in Dubai, the rent of a leased property may be increased annually, but it must not exceed the limits set forth by the Rera (Real Estate Regulatory Agency) of the Government of Dubai in accordance with Article 9 of the Dubai Tenancy Law which states:

"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."

In view of the foregoing, you may refer to the rental calculator provided on the website of the Rera to understand the amount of rent that may be increased.

In Sharjah, it is learnt that the rents of leased properties may not be increased before the completion of three years of lease of the property. In Ajman, it is learnt that rental hikes are allowed once in three years after the lease of property.

There are no specific provisions in the applicable laws of Dubai, Sharjah and Ajman, which state brokers are entitled to charge one per cent commission for renewal of the tenancy contract.

Ashish Mehta, LLB, F.I.C.A., M.C.I.T., M.C.I.Arb., is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom, Singapore and India. He manages a multi-jurisdictional law firm practice, providing analysis and counselling on complex legal documents, and policies including but not limited to corporate matters, commercial transactions, banking and finance, property and construction, real estates acquisitions, mergers and acquisitions, financial restructuring, arbitration and mediation, family matters, general crime and litigation issues. Visit www.amalawyers.com for further information. Readers may e-mail their questions to: news@khaleejtimes.com or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.

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