Know your tenancy contract
The relationship between landlord and tenant has become more complicated than it used to be. A clear and concise tenancy contract can minimise complications and disputes in the future
Most residents would be familiar with the standard, blue tenancy contract that has been in use in Dubai for a decade and which is unfortunately still the document of choice for many landlords and property management companies.
Although I am sure this document served its purpose initially, the relationship between landlord and tenant has become a little more complicated than the terms provided for in this document. To avoid unnecessary complications and disputes down the line, I always suggest that parties to a tenancy contract ensure the document that is eventually signed is clear and concise and clearly sets out the rights and obligations of each party, within the boundaries of the law, and which is not in any way conflicting and confusing.
Being on opposite sides of the relationship, each party will have different requirements that they would want in the agreement. These requirements can be easily drafted into a simple and clear agreement, leaving nothing to the imagination and, ultimately, open to interpretation.
The following is a non-exhaustive list of the provisions that should be included in a residential tenancy contract:
- Full details of the landlord and tenant. This should include full names, passport numbers, address for notices, telephone and fax numbers and email addresses.
- A clear description of the leased property. It should be clear in the contract which property is being leased. I suggest that the unit/villa and plot number (as shown on the title deed and affection plan) be inserted into the contract as well as the more common name of the property, such as street name and number. This way, there can be no dispute as to which of the landlord’s properties the tenant intends to lease and which the landlord intends to lease out.
- Accurate details of the commencement and termination dates. The commencement date of the lease is not always the date on which the tenancy contract is signed and so it should be made clear what date the actual lease will start. This is important for rental payments (cheque dates) and notice periods.
- Details of the full rental and security deposit amounts. The full annual rent should be clearly set out in the contract, as well as details of how and when this amount is to be paid. The same goes for the security deposit, which is more often than not handed over to the landlord or property management agent on the date the contract is signed. With regard to the security deposit, the contract should clearly set out the circumstances under which the same is held and how and when it will be returned to the tenant by the landlord. If the payment is to be made to any party other than the landlord, the contract must be clear on this and the tenant should conduct proper due diligence to ensure the third party is legally authorised to receive the amount.
- Renewal and termination formalities. It should be made clear in the agreement how the notice of renewal, non-renewal or termination (in the case of default) should be served.
- Notice, dispute resolution and governing law provisions. The agreement should clearly set out the way in which the notice should be served. Under current laws, parties are at liberty to choose to have a dispute decided at arbitration, as opposed to via the rent committee. If the parties do wish the contract to provide for arbitration, this should be agreed in writing in the contract.
- Miscellaneous provisions. The tenancy agreement should also note how the property is to be used, provide for whether or not the landlord permits or forbids sub-letting, provide for insurance obligations and make allowances for the maintenance, use and upkeep of furnishing, fixtures and fittings (if any).
- Additional agreed terms. If the parties have agreed to anything that is out of the ordinary, this should be clearly set out in the contract. For example, the landlord may agree to allow the tenant to renovate the bathrooms on the understanding that the landlord gains the benefit of any such renovation when the tenant leaves the property.
As mentioned above, this list is not exhaustive. I cannot stress enough how important it is for the contact to be drafted correctly and clearly at the start of the relationship, and if any changes are made during the tenancy period, then these should also be reduced to writing. This will avoid uncertainty and disputes later on and should lighten the load of Dubai’s rent committee.
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