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Dubai Rental Dispute Settlement Committee Awards Compensation for Fraud In Terminating The Lease Contract

Introduction

In a significant dispute and one of the most notable cases before the Dubai Rental Dispute Center, the Rental Committee in the Emirate of Dubai issued a judgment in favor of Ibrahim .N. Partners  client, awarding compensation for the material and moral damages incurred as a result of terminating the lease contract in violation of the conditions outlined in Article (25/2) of Law No. 33 of 2008, as amended by the provisions of Law No. 26 of 2007, which is considered as an illegal evection. The committee concluded that the landlord resorted to deceiving means to evict the tenant. The landlord had expressed his desire not to renew the lease contract due to his intention to sell the property. However, it was later revealed that the landlord had gifted the property to his wife, and subsequently leased the property to a new tenant at a higher rental value.

Factual Background

The Case originated from the tenant receiving a formal notice from the landlord informing him of his intention not to renew the lease contract due to his desire to sell the property. This compelled the tenant to comply with the landlord’s request, leading to the tenant vacating the premises and incurring significant expenses in search of a new rental property at a higher market rate. Subsequently, the tenant was surprised to know that the property had not been sold, but rather, the landlord had gifted it to his wife, who then proceeded to lease it to another tenant at a significantly higher rent, 60% more than the previous rental value.

By contacting us, our team has advised the client of his rights as a tenant, and a Case was filed on behalf of the tenant before the Rental Dispute Center, where we claimed compensation for the material and moral damages suffered by the tenant as a result of vacating the premises under circumstances not provided for by the law and the landlord’s deception in order to evict the tenant without just cause. it was clear that the landlord evicted the tenant for the sole purpose of re-leasing at a much higher price, thus exploiting and benefiting solely from the eviction ensured by the law in specific cases.

During the proceedings of the Case, we were able to prove the landlord’s deceit in evicting the tenant. We requested information from the Land Department regarding the current owner of the property according to the lease contract, and the response confirmed that the property had been transferred by way of deed of gift (not sale) to a woman who was identified as the landlord’s wife. This contradicted what the landlord had stated in the legal notice as the reason for eviction, which was sale, as required by the law as a justification for eviction.

Rental Dispute Committee (“RDC”) Ruling

As we had demonstrated to the honorable court the landlord’s ill intent in using an untrue reason, namely the sale, as a pretext for eviction merely to re-lease the property at a higher price than the tenant could afford, which constitutes a clear violation of the law and the exclusive grounds for eviction required by the law, the court confirmed the deceit as the sale did not occur, but only the gifting of the property to the landlord’s wife. Consequently, the court ruled in favor of the plaintiff by a final judgment awarding a total compensation of AED 375,000 for the damages incurred by the tenant, which include:

– Expenses related to moving from the old residence to the new one and all associated moving costs.

–Rental expenses including brokerage commission and insurance

-Expenses for re-subscribing to electricity, water, and other essential living services.

-Difference in rental value between the old and new leases for one year.

Conclusion and Recommendation

With this ruling, the Dubai Rental Dispute Settlement Committee confirms that circumventing the clear provisions of the tenancy law by invoking one of the exclusive reasons specified in Article (25/2) of Law No. 33 of 2008, without actually fulfilling any of the exclusive reasons mentioned in the aforementioned article and being able to prove them, will inevitably grant the tenant the right to file a compensation claim for the material and moral damages incurred as a result of such actions by the landlord, contrary to the provisions of the law.

As this ruling reaffirms – underlining the truth – the Rental Dispute Settlement Center remains alert in compensating tenants and safeguarding their interests, given their pivotal role in the country’s most significant commercial activity, real estate. Legal tenant centers must be rigorously addressed by the judiciary to prevent residents from losing confidence in the law’s and the center’s ability to protect their interests, particularly concerning housing, which is one of life’s most crucial guarantees of security, safety, and stability.

Therefore, we urge all tenants in Dubai not to comply with and agree to vacate the leased property until they have ensured the legitimacy of the reason invoked by the landlord in the eviction notice, whether the reason is sale, renovation, or personal use. Each reason specified in Article (25/2) of Law No. 33 of 2008 must be verified before the property can be lawfully vacated.

We hope to have provided the reader with useful information, and if there are any inquiries regarding the legal status of similar cases, whether for landlords or tenants, please feel free to contact us using the following contact information:

Mohamed Abdelrehiem – Partner and Head of Dispute Resolution

Hazem El Bagoury – Associate

Hany Zaid – Associate 

Yousif Diab – Associate

Email: mohamed.abdelrehiem@inp.legal