UAE Property: ‘Can I get my security cheque back if I have not yet signed a rental agreement?’

Dubai Marina. If a deposit was provided without any mention of it being non-refundable, and if the tenancy contract is off, a tenant is entitled to request his cheque back. Bloomberg

Question: I came across a property listing on a portal and reached out to an agent to express my interest. I provided a security cheque, issued in the owner's name as requested.

The remaining cheques for rent were scheduled to be handed over the following week. However, due to an unfortunate incident in my family, I informed the agent that I could only supply those outstanding cheques after 15 days.

But the agent said he cannot wait for 15 days despite their knowledge of my situation, and also refused to return the security cheque.

I am willing to proceed with the rental agreement, but I require the 15-day extension. The agent currently holds my security cheque as collateral. I requested the return of the security cheque, but the agent has declined.

Is there a way to get back my security cheque or go ahead with the contract but give them the cheque 15 days later? SN, Dubai

Answer: Your concern should be directed towards the owner, rather than the agent. It is likely that the agent is following the instructions of the owner, rather than acting on their own accord. I recommend verifying that this is indeed the case.

If the deal falls through, you are entitled to a refund of your deposit. However, before taking any drastic action, I recommend reviewing the wording on the deposit receipt to determine if there are any clauses indicating that the deposit may be non-refundable.

If a deposit was provided without any mention of it being non-refundable, you are entitled to request your cheque back given the deal is off. But rather than going through all this stress, it’s better to try to find a compromise in your moving-in date or payment of the rent, to proceed.

Waiting two weeks is not too long but perhaps try to offer a small compensation or another solution to get the owner to accept the payment two weeks later.

Q: My tenant’s rent contract comes up for renewal soon. In the contract, the tenant has signed off on additional terms shown in the annexure or addendum mentioned on the Ejari contract, which include the clause below.

“The tenancy period will be for the fixed period of one year. Renewal of the contract will be at the landlord’s option and upon mutual agreement of both parties. It is agreed that renewal terms will use the prevailing market price as a reference benchmark.”

I sent renewal terms based on the aforementioned conditions 90 days prior to the lease renewal. The tenant insists that only the Real Estate Regulatory Agency index-based increase is applicable, despite having signed off on the clause included as an addendum in the Ejari.

He also claims that all additional terms relating to the allocation of maintenance charges cannot be changed.

Please provide guidance on the applicable Rera rules in the aforementioned situation. SR, Dubai

A: Despite the fact that both of you agreed on the clause mentioned in your contract, when it comes to disagreements as we have now, where the tenant no longer agrees to this clause, the law will prevail.

In this case, any increases in rent can only be as per the Dubai Land Department’s rent index, rather than the market rent, which only takes into consideration vacant unit prices, not current tenanted ones.

What seems to be the case here is that your tenant is going against one part of the agreed contract but not the other (maintenance), which presumably is in his favour now.

In instances such as this, the most effective course of action, aside from reaching a mutually agreeable compromise, is to initiate a case at the Rental Dispute Settlement Centre to allow a judge to make the final decision.

In response to your inquiry regarding whether the current contract will be upheld or if the judge will rule in the tenant's favour, unfortunately, I am unable to predict the outcome. But suffice to say that the judge will decide, and all parties will then have to abide by the decision.

I would advocate to never have clauses in a rental contract that go against the spirit of the rental laws. In the event that parties involved in the contract are unable to reach an agreement, it is important to remember that the law will always take precedence.

Mario Volpi is head of brokerage at Novvi Properties and has worked in the property sector for 40 years in London and Dubai. The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to [e-mail]