Dubai: Will landlord refund advance payments if contract is terminated early?

Question: I have been staying in a one-bed apartment in Dubai for the last four months. I had paid the rent for this unit in one cheque. If I wish to leave this apartment now, is the owner liable to return 8 months' worth of rent? Or do I forfeit the whole amount? Can you please explain the rules surrounding this?

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Answer: In Dubai, a contractual relationship between a landlord and a tenant is governed by a rent contract which is subsequently registered with the Dubai Land Department (DLD) in the form of ‘Ejari’.

The rent contract must include a clear and detailed description of the rented property, the purpose of the rent, the rental term, the amount of rent and its payment method. Therefore, rent agreed in a rent contract needs to be paid by a tenant in accordance with Article 4 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 states:

“1. The contractual relationship between a landlord and a tenant shall be regulated by a rent contract which includes a description of the rented real property that leaves no room for uncertainty; the purpose of the rent; the term of the rent contract; the rent and its payment method; and the name of the real property owner if the landlord is not the owner.

2. All rent contracts related to real property which is governed by the provisions of this law, and any amendments thereto, shall be registered with Rera (Real Estate Regulatory Authority).”

Furthermore, a rent contract, cannot be unilaterally terminated by either a landlord or a tenant during its term. A rent contract may only be terminated by mutual consent of both a landlord and a tenant or in accordance with the provisions of the prevailing rent law in the emirate of Dubai. This is in accordance with Article 7 of Law No. 26 of 2007 Regulating the Relationship Between Landlords and Tenants in the Emirate of Dubai:

“Where a Lease Contract is valid, it may not be unilaterally terminated during its term by the Landlord or the Tenant. It can only be terminated by mutual consent or in accordance with the provisions of this Law.”

In Dubai, a rent contract may include additional terms and conditions such as early termination of a rent contract by a tenant and the penalties which a tenant may have to bear for early termination. This is in accordance with Article 794(1) of the Federal Law No. 5 on Civil Transactions Law of the UAE amended by Federal Law No. 1 of 1987 and Federal Decree Law No. 30 of 2020, which states, “One of the contracting parties may, for an unforeseen excuse concerning him, ask the termination of the lease contract and, in this case, he shall warrant to the other party, within customary limits, against the damages that he may sustain as a result of such termination.”

For legally terminating a rent contract before its expiration, the tenant may provide written notice to the landlord, adhering to the notice period specified in the rent contract. Furthermore, the tenant may be required to pay an early termination penalty as stated in the rent contract.

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