Tenancy contract
The landlord has the right to increase the rent but he should do so no less than 90 days prior to the date on which the tenancy contract expires. Image Credit: Supplied

Question: A year ago, I rented a villa from a real estate office, and the lease contract was for a year and a month. The lease expires in February 2023. Two weeks ago, the real estate office sent an email informing me that the rent will be increased. Is the real estate office legally entitled to increase the rent and how much is the legal increase according to the rental law in Dubai? Do they have right to evict me from the property if I do not agree to the increase? According to the rental law, who is responsible for the maintenance of the property, the owner or the tenant? Please advise.

Answer: The landlord has the right to increase the rent but he should do so no less than 90 days prior to the date on which the tenancy contract expires. Otherwise, he doesn’t have the right to oblige the tenant to accept the new rental nor does he have the right to evict the tenant from the tenancy.

This is stipulated in Article 13 and 14 of Law No. (33) of 2008 Amending Law No. (26) of ‘2007 Regulating the Relationship between Landlords and Tenants in the Emirate of Dubai’ which state: For the purposes of renewing the tenancy contract, the landlord and tenant may, prior to the expiry of the tenancy contract, amend any of the terms of the tenancy contract or review the rent, whether increasing or decreasing it.

Should the landlord and tenant fail to reach an agreement, then the tribunal may determine the fair rent, taking into account the criteria stipulated in Article (9) of this Law.

Unless otherwise agreed by the parties, if either party to the tenancy contract wishes to amend any of its terms in accordance with Article (13) of this Law, that party must notify the other party of same no less than ninety (90) days prior to the date on which the tenancy contract expires.

There is no definite increase for the rental amount, it is usually determined by the municipality or the authority concerned, as per Article 10 of the law, who shall have the exclusive authority to specify percentage of rent increase in the Emirate, with regard to of economic circumstances.

Moreover, the Rental Dispute Centre (tribunal) in case of a dispute between the parties have the right to determine the rental amount for the property, taking into account the criteria determining the percentage of rent increase set by RERA, the overall economic situation in the Emirate, the condition of the real property, and the average rent of similar real property markets within the same area, and in accordance with any applicable legislation in the Emirate concerning real property rent, or any other factors which the tribunal deems appropriate.

The responsibility for the maintenance is usually on the landlord unless otherwise agreed between the parties. Article 16 of the law states that the landlord shall, during validity of the tenancy contract, be liable for undertaking maintenance of the property and shall rectify any defects or faults that affect tenant’s intended benefit from the property, unless the two parties agree otherwise. This shall not violate tenant’s obligation to execute agreed upon maintenance or that which is ordinarily done by tenants.

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Claiming the delayed salaries

Question: I have been working in a private company for two years as a manager. I have a monthly salary, in addition to being a 20 per cent partner in the founding contract. I have not received my salary for 6 months, according to a decision by the company’s board of directors. My question is, whict court is competent to hear the case to claim my late salaries? The company is currently going through a financial problem. Do I have the right, according to the law, to file a lawsuit to liquidate the company? Does the law require the consent of all partners? Please advise

Answer: If you are appointed as per a labour contract then you have to file a case in the labour court. But if your management is as per the memorandum of association or Statute of the Company then you have to file your case in the civil courts.

In general, unless the Memorandum of Association or Statute of the Company provides for the method of liquidation or the partners agree otherwise upon the dissolution of the Company, the provisions of the Decree-Law no 32 of 2021 regarding Commercial Law shall apply to the liquidation of the Company. Liquidation of the company depend on the company type whether it is a limited liability or a Joint Stock Company, etc.

For the limited liability company, if the partners as per the majority prescribed in the Memorandum of Association of the Company, agree to liquidate the company, they can appoint a liquidator for this purpose without filing a case in the court. If there is no agreement, then the court will appoint a liquidator as per a request applied by the partners holding one quarter of the capital. Article 308 of the Federal Decree Law no. 32 of 2021 states that if the losses of a limited liability company reach half of the capital, the managers shall refer the dissolution matter to the general assembly of the partners. The dissolution decision shall be passed by the majority prescribed for amending the Memorandum of Association of the Company. If the losses reach three quarters of the capital, the partners holding one quarter of the capital may request to dissolve the company.

For the joint-stock Company , if the accumulated losses reach half of its issued capital, the board of directors shall within 30 days from the date of disclosure of periodic or annual financial statements to the Ministry or to the Authority - each within its own competencies - invite the general assembly to convene within 30 days from the date of the invitation, in order to consider making a decision as regards the company’s continuation of its activity or dissolution prior to the expiry of its term. If the board of directors fails to invite the general assembly to convene or if the general assembly fails to issue a decision in the matter, each interested party may file a lawsuit before the competent court seeking the dissolution and liquidation of the company in accordance with the provisions of the law.