Question: My landlord recently served me with an eviction notice. The reason for the eviction is that the landlord wants to sell the property pursuant to Article 25.2 (d) of Law 26 (2007) Amendment 33 (2008).
Article 25.2 states that the notice should be given upon expiry of the contract, which in my case is July 7, 2023. However, the eviction notice states that it is effective on the date it was served, which is March 1.
Is the eviction notice valid? Will I need to move out within 12 months from March 1 or do I need to refer this to the Real Estate Regulatory Agency and challenge the validity of the notice on the basis that it does not comply with Article 25.2?
I appreciate that the matter of three months may be a small issue, but given increasing rents at the moment, this could amount to an additional Dh25,000 in this year’s budget, which I had not accounted for. I would appreciate your thoughts on this. GA, Dubai
Answer: It is true that the law states that a 12-month notice of eviction should be served upon expiry of the tenancy agreement.
However, some judges at the Rent Dispute Settlement Committee have allowed eviction notices to be served at any time.
The only way to check the validity of your situation would be to file a case at the RDSC and hope your judge follows the exact wording of the law.
The law is not set on precedent, so any result is at the discretion of the judge of the day.
Therefore, if filing a case is too drastic or time-consuming, you will have no other alternative but to try to negotiate with the landlord or, if not him, the new owner.
Q: Do you think it is fair to landlords to turn annual rental agreements into an indefinite lease at a fixed price?
Will this not distort the market by raising rents higher than they would otherwise be, due to the impact on available supply by artificially suppressing prices on existing tenancies?
Do rental controls generally result in a bad housing stock? PC, Dubai
A: Technically, all rental agreements are for an indefinite period, despite the contract having a yearly validity.
The landlord has to renew assuming the tenant wishes to do so. That said, the real question would then be the fixed-price aspect.
While this gives clarity to both the tenant and landlord, this would only work in a stable market, one where there is little to no price movement.
However, we all know this never happens because the property market is forever moving either up or down.
Within this movement, we have winners and losers, depending on where the market is heading and, as such, there will be the need to adjust agreements from the perspective of a landlord or tenant.
Dubai has been running rental controls for many years now with the introduction of the Rera rental calculator, which really only works when the market is rising.
When the rental market is in decline, tenants do not use the calculator because they rely solely on the open rental market to determine whether they renew or move to potentially cheaper properties elsewhere.
Dubai is currently experiencing an imbalance in housing stock, especially properties put up for sale, compared with the population growth, and rental prices are also rising for new tenancies but are restricted to the controls of the Rera rental calculator for existing tenants.
Generally speaking, the residential rental market is healthy, although weighted towards landlords at the moment.
Mario Volpi is the sales director at AX Capital. He has worked in the property sector for 39 years, in London and Dubai. The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to m.volpi@axcapital.ae
