Toyota building demolition: What Dubai tenants need to know about partitions and eviction

Dubai: Dubai’s iconic Toyota Building on Sheikh Zayed Road is set to be demolished in 2027, with almost 70 per cent of its tenants having already moved out but the situation has also brought wider questions over tenant rights, illegal partitions and the rules governing shared housing in the emirate.

Gulf News spoke to the building management, which said residents had not been forced to vacate, although electricity to the building has been disconnected. Some tenants still had rental contracts running until December 2026.

The management said it was not aware why the electricity had been disconnected and attributed the matter to Dubai Municipality. An agent also said the issue was linked to a number of partitioned apartments in the building, although this could not be independently confirmed.

Asked why any partitioned apartments had not been addressed earlier, the building management said it was not permitted to enter rented apartments after they had been handed over to tenants.

“Because we cannot enter into the flat as per the rules of the regulation for the municipality. Once we give the apartment, we cannot enter into the rooms,” the management said.

The management did not disclose how many apartments were affected by the electricity disconnections.

While the circumstances at the Toyota Building remain specific to that property, they highlight a broader issue facing Dubai’s rental market: what happens when apartments are divided into unauthorised rooms or bed spaces, who is responsible, and what protections do tenants have when a building is due to be demolished?

Who can legally operate shared housing in Dubai?

Dubai Law No. (4) of 2026 establishes a regulatory framework for how shared housing is managed, occupied and leased across private development zones and free zones.

Under the new rules, a property cannot simply be divided into rooms or bed spaces and rented out as shared accommodation without the required permit.

Only property owners, or companies authorised to manage or lease units on an owner’s behalf, can legally operate shared accommodation. This can include an owner leasing the property directly, a management company acting for the owner, or a company leasing the property and subsequently subleasing it to residents.

Tenants themselves are excluded from that chain, meaning a tenant cannot simply divide an apartment and rent out rooms or bed spaces without the necessary authorisation.

The law also gives Dubai Municipality powers to determine the maximum number of occupants allowed in each unit, the space allocated to each occupant and the facilities and services that must be available.

A permit is required for shared housing

“A real estate unit cannot be allocated for shared housing without obtaining a permit. This changes the conversation completely. It is no longer simply a question of whether the landlord agrees to subletting or whether several people can contractually agree to live together,” said Ahmed Elnaggar, CEO of Elnaggar and Partners.

“The property itself must enter the shared housing regulatory system," Elnaggar, said.

So, for example, an owner cannot simply decide to divide an apartment between six people because it makes commercial sense. The property must first be properly permitted for shared housing.

Dubai Municipality will also set standards for areas where shared housing can operate, taking into account population density, infrastructure, sewage systems, urban planning and the characteristics of the surrounding residential neighbourhood.

Who is responsible for illegal partitions?

Responsibility can depend on who created or operated the unauthorised arrangement.

“The penalties may fall on the property owner or anyone operating the apartment as an unauthorised shared space,” Awatif Al Khouri, lawyer and founder Awatif Mohammad Shoqi Advocates and Legal Consultancy, said.

“While residents who simply rent a partition may face eviction, fines are more likely to be issued to landlords or main tenants who profit from dividing the flat without permission. Property management companies may also be held liable if they fail to monitor the building or ignore safety standards set by Dubai Municipality.”

Ahmed Odeh, Managing Partner at MIO & Partners, said that where a landlord discovers that their unit has been partitioned, they can file an expert case before the Dubai Courts.

“The court-appointed expert attends the premises and records what is actually there, for example the number of beds, who is in occupation, and their Emirates ID numbers. That report is then the evidence on which the landlord files for eviction,” he said.

“A tenant who partitions without the landlord's written consent breaches the tenancy law and exposes himself to eviction and to the cost of restoration.”

Where a management company authorised the works, its position would depend on the capacity in which it acted, whether as an agent for the owner or as an operator in its own name, he added.

Fines for illegal shared housing

The new law provides for fines ranging from Dh500 to Dh500,000. If the same violation is repeated within one year, the fine can be doubled, with the maximum reaching Dh1 million.

Other administrative measures can include suspending the activity for up to six months, revoking the permit, coordinating the revocation of a commercial licence, suspending public services to a violating property, restricting transactions involving the property and refusing to register lease or management contracts until the violation is rectified.

In certain circumstances, a violating unit can also be evacuated following a decision from the Execution Judge.

Property owners and operators running shared housing have one year to bring their units into compliance with the new regulations.

What happens when a Dubai building is demolished?

The rules around demolition are separate from those governing illegal partitions.

Under Article 25 of Dubai’s Rental Law, a landlord seeking eviction because a property is to be demolished and reconstructed must provide the tenant with 12 months’ notice, stating the reason for eviction. The notice must be served through a Notary Public or by registered post.

Dubai’s tenancy legislation also refers to demolition and reconstruction where the required permits have been obtained from the competent authorities. This means a landlord cannot necessarily rely simply on an intention to demolish a building to end a tenancy.

For tenants, the distinction is important. A building being earmarked for demolition does not automatically mean a tenancy can be ended immediately, particularly where the required notice and legal conditions have not been met.

There is also a protection for tenants after the work is completed. Under Article 29, a tenant has a right of first refusal to rent the property after it has been demolished and reconstructed, or renovated or refurbished by the landlord. The tenant must exercise this right within 30 days of being notified.