Since foreign residents began buying homes in the UAE, the rental market’s economics has also expanded. As property owner you would need to optimize your rental income while also making sure that your rights were safeguarded. Tenancy and rent disputes have consequently emerged as one of the most typical legal issues in the United Arab Emirates.

The UAE government responded by passing the Tenancy Law, which lays out the fundamental guidelines for the conclusion and registration of rental and leasing agreements. The rights and responsibilities of landlords and tenants are also governed by the tenancy legislation. A contract that must be recorded with the Real Estate Regulatory Agency (RERA) governs this. This agreement cannot be terminated early without the other party’s consent, and in that case, previous (at least three-month) notice would be necessary.

If a landlord and tenant have a dispute, it is likely that legal counsel will be needed to resolve the matter in the best possible way. The renter and the owner may be represented by rental dispute lawyers in this situation, assisting both parties in handling the case in the Dubai Rental Disputes Centre and coming to a mutually agreeable conclusion.

Legal Assistance With Tenancy Disputes

Rental disagreements between landlords and tenants frequently stem from rental pricing. Most of the time, it makes perfect sense for both parties to carefully analyze the rights and responsibilities mentioned in the rental agreement in order to prevent disputes. Given these factors, it is preferable to work with a rent dispute lawyer in the UAE who focuses on matters involving rental properties because they have a lot of expertise managing these types of disputes. The following are the services this attorney can provide in tenancy disputes:

 

Legal Analysis – A specific tenant and landlord law situation might prompt Expert Rental Dispute Lawyers to search for pertinent laws. They have access to legal databases, which can make researching cases quicker and easier. The legal studies will help your case by acquainting you with your rights, obligations, and responsibilities as a citizen as well as a landlord or tenant.

 

Examining Relevant Documentation and Providing Advice: You can get help from a professional rental dispute lawyer to find any holes in your rental agreement. It is important for tenants to know that some landlords include an attorney’s fee clause in a rental or lease agreement in order to avoid needless legal disputes. If this clause is in your rental or lease agreement, you’ll be eligible for repayment of your legal fees and other related costs if you prevail in your case against the landlord.

 

According to the tenancy legislation, a contract must be signed and registered with the Real Estate Regulatory Authority before relocating into a house, an apartment, or any other type of property in the United Arab Emirates. The following are some of the elements listed in the contract law’s tenancy agreement:

• The landlord’s duty and rights
• Tenant rights and responsibilities
• The duration, amount, and frequency of payments under the contract, as well as the location of the rental property
• Other arrangements between owner and renters that are essential

Landlord’s obligations to tenants include:

• Maintain the unit for the duration of the lease and rent it out in livable shape. Make any necessary repairs as per the contract
• provide you with the necessary service
• not raise the rent unless it complies with Dubai’s statute prohibiting rent increases
• Unless you committed a mistake, give your security deposit back

As an owner, you have a right to expect your tenant to:

• undertake to use your residential property lawfully
• pay rent in full and on time, and not engage in any conduct that is forbidden by the agreement
• not cause damage to the property
• not offer lodging to those not covered by the leasing agreement
• respect and adhere to the contract

A dispute may be started by either the landlord or the renter if any of these are broken.

 

What Are Dubai’s Most Common Rental Conflicts?

The common rental conflicts that may occur between a landlord and a tenant include:

• Rent increases
• Late, unpaid rent
• Inadequate upkeep
• Landlord trespassing on a tenant’s property without authorization
• Requesting a security deposit for rent without warning
• Landlord disregarding a tenant’s complaint about the property
• Tenant making changes to the property without the landlord’s approval
• Failure of tenant to pay their bills

 

How Is Eviction Enforced In The UAE?

The legislation governs the manner in which an eviction shall be conducted, which actually is in the tenant’s best interests. All real estate-related matters are under the control of the Real Estate Regulatory Agency (RERA). One of the regulating branches of the Dubai Land Department (DLD) is RERA and tenant-landlord interactions are governed by RERA laws, which outline each party’s obligations and the steps that should be taken in the case of a disagreement.

 

According to Law (33) of 2008’s Article (4), the landlord and tenant are responsible for ensuring that a valid lease agreement and all supporting papers are registered with RERA through Ejari.

When a tenant may be removed while the tenancy agreement is still in force, as well as the conditions for evicting a tenant after the contract has ended, are specified in Article 25.

According to Article (6) of the Law, if the tenant does not leave the property after receiving a formal statement from the landlord and the tenancy agreement has expired, it is believed that the tenant wants to renew the tenancy for the same period of time or one year.

The circumstances under which a landlord may attempt to remove a tenant before the contract’s expiration are outlined in Clause 1.

According to Article (25)’s Clause (1), the landlord has the legal authority to evict a tenant who doesn’t follow any rules within 30 days of being informed that the lease is about to end.

Clause (2) of Article (25) of Law No. (33) of 2008, indicates that if the landlord wants to remove the tenant after the contracts have expired, he must provide the tenant a notice of eviction for a minimum of 12 months.

According to Article (31) of Law (26) of 2007, the tenant is obligated to pay the rent up until the final decision is issued once an eviction action has been launched.

The tenancy agreement will be continued upon the death of either the tenant or the landlord, in accordance with Article (27) of Law (26) of 2007. The lease can only be ended by the lessor with a 30-day notice.

The transfer of property ownership to a new owner will not have an impact on the tenancy, according to Article (28) of Law (26) of 2007. The present Tenant shall have unlimited access to the Property until the termination of the Lease.

In conclusion, while resolving a rental disagreement may be a drawn-out process, it is possible if both parties are prepared to deal with the legal processes and rules governing the tenancy agreement. If either one thinks otherwise, it is best to consult an expert rental dispute lawyer to help sort it out.

 

A bounced cheque which is also known as a dishonored or returned cheque is a non-sufficient funds cheque that cannot be processed because of the following reasons:

• There is not enough money in the account of the drawer on the date the cheque was issued.
• The bank account had closed prior to the encashment of the cheque.
• There is a technical problem such as a mismatch in the signature on the cheque and the signature in the bank’s records.
• The account holder instructed the bank to hold the payment.

The UAE has its set of repercussions for cases of bounced cheques and criminal charges are strictly imposed on people who present a cheque with insufficient funds or with full knowledge that it will not be cleared.

According to Article 632 of the Commercial Transaction Law, in the event of a default in the processing of a cheque due to any of the reasons stated above, a period of 3 days may be given to the cheque bearer to contact the drawer for the possibility of funding the cheque. Should the drawer be unavailable for communication within the given period, the drawee or cheque bearer has the right to take legal action. In such a case, the drawee can file a criminal complaint about the bounced cheque along with a civil case for the recovery of the cheque amount. The civil case will provide the drawee with an assurance that the amount denied will be recovered.

The process of filing a legal case against a drawer can go through several stages and the ramifications of a dishonored cheque may vary depending on the response of the drawer and the evidences provided.

1. Police Authority

A complaint on a bounced cheque may be initially reported to the nearest police station located in the concerned Emirate. This requires presentation of relevant documents and evidences. The police authority will automatically issue a warrant of arrest against the drawer. The drawer can respond by settling the case or submitting his passport so that further time may be given for him to provide the amount required. The warrant can be withdrawn after the drawer clears the matter or serves the jail time prescribed.

2. Public Prosecutor

The case will be forwarded to the Public Prosecutor for further investigations if the parties fail to resolve it at the police station. A report shall be prepared based on the proof provided. To give security to the drawee, the prosecutors can either hold the passport of the drawer or the guarantor or require a payment corresponding to the estimated amount of the cheque. The drawer will be kept in custody until the issuance of the final decision if the bail is denied.

3. Criminal Court

At the criminal court, the drawer may be convicted based on the evidence provided by the drawee. According to Article 401 of the UAE Penal Code, the punishment can either be a fine ranging from AED 1,000 up to AED 30,000 or imprisonment from one to three years.

There have been recent advancements where the government has stipulated laws to address small claims or petty offences. Such laws, enacted through the “One-day court”, allow small cases of bounced cheques to be given a decision within 24 hours and resolved with a detention sentence. This is now in force in Abu Dhabi, Dubai and Ras Al Khaimah and the effectivity in reducing the number of cases processed at the Criminal Courts has been observed. As a result, serious cases have better chances of getting resolved faster as the Criminal Courts now have enough time to deal with them.

In addition, Dubai has come up with a law on “Criminal Orders”, which allows the Public Prosecution to resolve “simple violations” with monetary penalty. The matter will only be transferred to Criminal Courts if there is an objection to the sentence issued and the objection is documented within 7 days of the issuance of the verdict.

An issued cheque worth AED 200,000 and below is classified as a simple offence and will be given a penalty of about AED 5,000 – AED 10,000. This is not punishable by imprisonment in Dubai. Thus, lawyers often advise their clients that when receiving cheques, it would be better if they require an amount higher than AED 200,000 so that in the event of a dishonored cheque, the drawer will be bound to face imprisonment. With such possible punishment, there will be a lesser chance of the drawer not funding the cheque.

If you have received a bounced cheque and would like to know the next steps in getting your investment back, Call Us Today!

Rules and Regulations of Bounced Cheque Law in Dubai UAE.

Bank cheque is a tool used by individuals to secure funds, contract business and pay obligations, but not all of them have the ability to fund these cheques and the volume of bounced cheque cases have sky-rocketed over the years.

To address this ever-growing state of affairs, the UAE Government has established a set of rules to guide both the issuer and the recipient of Bounced Cheque.

There are several UAE Laws that can be utilized to protect the recipient of Bounced Cheque and they can be done either in the criminal or civil court. The recipient can file a complaint in the police station against the issuer and the case will be forwarded to the public prosecution and then to the criminal court (under the new rules, the public prosecution, in an effort to adjust with the volume of cases with low-value claims, can now issue criminal orders to sentence offenders of low-value bounced cheque to pay fines rather than endure jail time).

According to a recent study, the UAE Public Prosecution categorized low-value cases like the ones where the bounced cheque amounts less than AED 200,000 hence the only issuer of cheques with an amount more than AED 200,000 are doomed to be sentenced with a jail term.

The recipient can also institute a civil action against the issuer for the amount of the bounced cheque and if the issuer cannot pay the amount, he can be imprisoned for a period corresponding to the unpaid amount.

As for the issuers, particularly for low-value cheques, they can avoid imprisonment by simply paying the fine corresponding to the cheque amount; however, this does not absolve them from paying the obligation when the recipient opted to institute a civil action to collect the amount due through a debt collection service.

For more detailed discussion of the intricacies of the Bounced Cheque Law in the UAE, you may contact Al Reyami Advocates and Muhyealdeen International Legal Consultants.

“I received a bounced cheque in UAE.  What do I do?”

A bounced cheque in UAE is considered a crime and as per the rules, instead of jail term there will be fines issued considering bounced cheque as a misdemeanor on the following basis,

– There is no date mentioned
– It is not signed by the drawer
– Does not clearly state the word “cheque”
– Does not specify the amount issued
– If it does not mention drawer and the beneficiary name

The new rule states that a bounced cheque of upto 50,000 will be given a fine of aed 2,000, for cheque between 50,000 to 100,000 will be given a fine of aed 5,000 and lastly for cheque between 100,000 to 200,000 will be given aed 10,000 fine.

A postdated cheque is not considered a crime. However, the cheque will be invalid if the date is not incorporated on the cheque or it contains fake duplicate signature or any sort of mark.

Please note that a bounced cheque crime may not be intentional but still the offence takes place once the cheque has been presented.

If you have received a bounced cheque and want to have your investment back, our debt collection lawyers are available to assist you in recovering your funds/assets.

Personal Guarantee in the UAE | Guarantors of Loans and Travel Bans

A personal guarantee is the legal promise to pay an amount of debt by for which that person will be held responsible in the event they are unable to pay the amount.

Implementation of Shariah law has lead to UAE Laws on personal guarantee being amended and as per Article 1068 as follows,

• A guarantee given by a guarantor compels him or her to meet their obligation to the guaranteed person on time and, if failing to do so can incur a fine issued by a competent judge.
• In case of a penal sentence (jail term) being issued in relation to failure to meet a personal guarantee, the guarantor may be compelled to pay a specified amount in addition.

The increase in trade due to the strong economic growth in the UAE has resulted in a higher number of transactions which require quick debt collection method to be adapted.

The most common mode used by institutions and traders is the post-dated or undated cheque which is fast and safe as compared to other methods.

For Free Legal Consultation, Call Us Today!

Construction Contract and Introduction to VAT in Dubai UAE

The introduction of VAT scheduled for January 2018 is going to have an impact on construction and consultancy contracts already in place and will be a pertinent point for consideration in new contracts being drawn up in the UAE. Those well ahead of the game may have already included articles to deal with the direct and indirect costs associated with VAT but it is highly likely that a great number have not. For those that have not included such clauses, the additional costs will most probably have to be absorbed under the existing payment terms which will have a knock-on effect to profitability. Those that have included the relevant clause will have the ability to add these costs over and above the contract rates or will at the very least have the grounds to take effective action to do so. As the time for implementation is fast approaching, having your contracts reviewed is something not to be put off any longer.

For many contracts across the construction sector in the UAE, the FIDIC standard forms are commonly used, particularly the FIDIC Conditions of Contract for Construction 1999 (Red Book). The Red Book specifically states that the contractor is obliged to pay all taxes as required under the law hence the contract price is understood to include such taxes based on the applicable rates in force at the ‘Base Date.’ That being said, there are also sections in the same book that state a contractor is able to claim additional costs that arise as a result from a change in the laws of the country where the works are being carried out.

Clause 14.1 (b) of the General Conditions of the Red Book states:

“the Contractor shall pay all taxes, duties and fees required to be paid by him under the Contract and the Contract Price shall not be adjusted for any of these costs except as stated in Sub-clause 13.7 [Adjustments for Changes in Legislation].

Clause 13.7 of the General Conditions the Red Book helpfully provides,

“The Contract Price shall be adjusted to take account of any increase or decrease in Cost resulting from a change in the Laws of the Country (including the introduction of new Laws and the repeal or modification of existing Laws) or in the judicial or official government interpretation of such Laws, made after the Base Date, which affect the Contractor in the performance of obligations under the Contract.”

The Base Date is defined as “the date 28 days prior to the latest date for submission of the Tender.”

What is particularly important to note is that Clause 14.1 includes the phrase “Unless otherwise stated in the Particular Conditions…” That translates to mean if the conditions do not impact clause 14.1 (b) or clause 13.7, a contractor may be permitted to claim amendments to the Contract Price because of the introduction of VAT. For a contractor to make such a claim for extension of time and/ or costs, the contractor should consider the notice requirements under clause 13.7. When looking carefully at additional conditions you should also be wary of sub clause 13.8 which refers to Adjustments for changes in cost and whether such a claim for changed costs has already been dealt with to ensure such a change is not doubly applied.

This standard clause is not included in contracts for Dubai Municipality and the costs of VAT will need to be absorbed in the contract price.

Construction contracts post January 2018
It is safe to conclude that the introduction of VAT will have an impact on the contract price of construction contracts. Specifying whether VAT is to be paid on top of the tender price or if it is included in the Contract Price will be necessary to avoid any misunderstanding or confusion.

 

Contract Laws and Breach of Trust in the UAE

UAE contract laws state that any action that goes against the implicit trust granted by an agreement between the trustor (the person giving the trust) and the trustee (the person entrusted) is known as breach of trust.

For a breach of trust to have taken place, some specific elements should exist.

1- The person in breach must obtain possession of an object either on the basis of trust, usage, lease or mortgage for breach of trust to happen

2- A breach of trust can only apply to a moveable object such as money or a document.

3. To be classed as a breach of trust, the object in question needs to be obtained, damages or wasted or lost without proper authority having been granted. This is a specific difference to theft or fraud as an actual physical damage must be suffered.

4- Where a shareholder prevents other shareholders from exercising their rights for personal gain, a clear breach of trust exists.

Business Lawyers in Dubai | Contact Lawyers for Business Disputes in UAE

Commercial disputes between companies, companies and customers or even between partners can cause a great deal of distress. They can also , in some instances lead to loss of valuable time, lost business and even bring about the collapse of a business venture in its entirety. Generally, amicable settlement of such a dispute would be beneficial to all parties in its speed and efficiency, even when at times it feels like a compromise you may not want to make. Understanding the ‘bigger picture’ and the potential damage of a protracted dispute is often much clearer in hindsight (when it’s too late). To that end, below is the list of top tips to help resolve a dispute:

a) Gather as much evidence as you can through witness statements in the initial stages; don’t forget, the people involved may be expats and may not be around later to provide the supporting evidence required. Such evidence is useful in determining the events of a situation but may not be necessarily favored for use in court where evidence of fact carries more weight (contracts and breaches of contract terms). Such evidence though is very useful in assisting your legal counsel to effectively drafting each memorandum (the submissions made to court for a case).

b) Try to negotiate with the other party/parties and have a strategy for what you would like to achieve from the discussions. If in your communications a response is requested by email within a certain period, try and follow that to avoid adding complications to the situation that detract from the main issues. Stay on topic. You are attempting to resolve the situation rather than create new arguments or debates.

c) The dispute should be managed by one person from the company, as the central point of contact and the person responsible for taking the required actions. This helps reduce the risk of contradiction or confusion that can easily come about from the different interpretations of the same information that are often present. This also helps to keep the correct focus on what you are looking to achieve and will assist with a clear and clean hand-over to your lawyers should they need to become involved.

d) If you need to extract evidence from a company asset (computer, laptop or smart phone for example) it is advisable to seek professional help to recover it. This limits the risk of not only losing the information but also the risk of suggesting the information has been manipulated or tampered with.

e) It seems an obvious point but one that is all too frequently ignored. Always read and understand every element of a document before you sign your name to it (particularly if it is not in your first language). By signing, you are agreeing to the content which may bind you personally and or the company you represent to actions and liabilities.

f) Although many legal documents in the UAE will have this phrase as a point of ‘best practice’, it does not carry the same legal authority in the UAE system. Without Prejudice is used in negotiations in other countries to ensure concessions made or information shared during negotiation cannot be used against you if a case goes to court as specific evidence. It can be used against you in the UAE regardless of whether the term was used.

g) UAE law favors documentary proof over and above oral (spoken) statements. There is no dramatic court room cross examination as seen in the movies, cases in the UAE are largely fought to a written strategy where the power, structure and content of the legal argument in writing will have the biggest influence on the outcome.

h) When terminating a contract, seek professional legal advice. There are often elements that can remain open for interpretation or action should this not be done in a way that actually closes the contract obligations between the parties. Obvious examples would include specified warranty periods or retention payments that may exist after the contact termination.

i) If you are going to need the support of good lawyers, get them involved as early as possible. Experience in dealing with these matters can avoid costly delays and the possibility of saying or writing the wrong thing that can alter the course of the negotiation and impact the liability to which a party is held. Delaying can also cost you more as there may be significant extra work to repair the damage done before bringing in the experts.