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One-cheque annual rent payment in UAE: Will tenants lose full amount if they have to vacate early?

KT reader asks if it's legal for real estate company to not return even a part of the payment

Question: My cousin, who lives in Sharjah, has paid his apartment's full-year rent in advance until November 10, 2023. If he intends to leave the apartment earlier, will he have to forfeit the entire amount? Or can he pay a penalty and get the remaining months' worth? His real estate company refuses to return even a part of the amount, saying it's against their policy.

Answer: Pursuant to your query, as your cousin is residing in a rented apartment in Sharjah, the provisions of Execution Regulation 2 of 2010 of Sharjah Law No. 2 of 2007 on Regulating the Relationship Between Landlord and Tenant in the Emirate of Sharjah are applicable.

In Sharjah, a tenant may not terminate a rent agreement before its expiry unless for reasons beyond the control of a tenant (force majeure). In the event of early termination of the rent agreement by a tenant, a tenant may be obligated to compensate a landlord not less than 30 per cent of the rent amount of the remaining period of the rent agreement, unless agreed otherwise with a landlord. This is in accordance with Article 22 (1) & (2) of the Executive Regulation 2 of 2010 of Sharjah Rent Law, which states, “Without prejudice to Article 12 of the Law Number (2) of 2007:

1. If the lease is for a fixed period, the tenant may ask for termination of such lease, before the expiration of its period if it is proven by the tenant that there are unexpected force majeure events that make the execution impossible;

2. The committee, may if it is content with such force majeure events, terminate the contract by obligating the tenant to pay compensation to the landlord in an amount not less than 30 per cent of rental of the remaining period of the lease contract unless otherwise agreed by parties.”

Moreover, in the event of early termination of the tenancy contract in Sharjah, a tenant may receive any refundable amount from a landlord once the tenant vacates the premises or as determined by the Sharjah Rent Dispute Committee (RDC). This is in accordance with Article 22 (3) of the Executive Regulation 2 of 2010 of Sharjah Rent Law, which states, “Without prejudice to Article 12 of the Law Number (2) of 2007.

The plaintiff (tenant) shall pay the compensation set out in paragraph (1) above. The committee shall not instruct to deliver the postdated cheques or advance rentals to the tenant unless such tenant delivers the leased premises free from anything and on the date determined by the committee."

Based on the aforementioned provision of law it is assumed that early termination of your cousin’s rent contract may be due to reasons beyond his control (force majeure). In this event your cousin’s landlord does not agree with him to terminate the rent contract and refund the advance rent already paid by him for the remaining period of the rent contract, he may approach the Sharjah RDC and file a rent dispute case against his landlord.

Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom and India. Full details of his firm on: www.amalawyers.com. Readers may e-mail their questions to: news@khaleejtimes.com or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.

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