Tenancy Law is one of the most important aspects of societies' life by means of which individuals' rights and duties are determined. Besides, it also sets guiding principle for interactions among individuals in general and for resolving disputes thereof in particular. Tenancy law is considered to be the backbone of every individual's daily life as it is a tool regulating tenants' and landlords' (collectively referred as Parties) transactions through tenancy executed contract. Further, tenancy law has been amended from time to time to bring it in line with current circumstances in addition to the market and social demands thereof.
In this article we seek to accentuate the tenancy law of Abu Dhabi; its latest amendments and further regulations setting out the obligations of the landlords and tenants in accordance with terms of law.
Tenancy law was not exclusively set out in single legislation or act in the emirate of Abu Dhabi. However, we may say that it is a group of laws regulating the rental relation between the Parties either for residential, commercial or industrial purposes by means of establishing certain mechanisms. It also outlines all procedural steps surrounding these collaborations between the contractual parties as well as setting out the penalty of going against the rules already laid down.
In 2006, Abu Dhabi Law Number 20 was issued to regulate the relation between landlord and tenant on matters such as increasing rental prices and evicting the tenant from property. Before the amended Law Number 4 of 2010, landlords could not demand tenants to vacate the rented property upon expiration of their tenancy contract. However, circumstances have changed after the below amendments.
The main amendments to the law number 20 of 2006 (the Tenancy Law) include the following:
- Abu Dhabi law number 4 of 2010:
This law entitled the landlord to seek eviction of tenant from the property upon expiration of their tenancy contract and further the landlord may also refuse renewal of contract. A rent cap of 5% was applicable; however tenants were subject to 5% increase in rent upon renewal of the contract without previous intimation to tenant. This 5% cap is removed due to further amendments.
- Abu Dhabi Executive Council Decision issued law number 32 issued in 2012:
This Executive Council Decision removed the rent cap of 5% and grants landlords the liberty to raise the price as per the market rates for their interest. However, the Tenancy Law also provides for rules concerning notice periods required in case the landlord seeks to evict the tenant or seeks to raise rental amount or any modifications in the contract. The landlords must notify the tenant by giving two months notice by issuing an evacuation/eviction Notice or a prior note stating the proposed modification in the contract and indicating the specific alteration the landlord desires to apply. For commercial properties the notice period is deemed to be of minimum 3 months. It is pertinent to note that in case the landlord does not serve an eviction or rent increment notice during the above course of time before renewal, the contract shall be deemed to be automatically renewed with same price and same terms.
- Abu Dhabi Executive Council number 4 of 2011 on rules and procedures of registration of tenancy contracts in the emirate of Abu Dhabi:
Abu Dhabi Executive Council number 4 of 2011 introduced rules and procedures for landlords to register their tenancy contracts at the Abu Dhabi Municipality (ADM). The resolution introduced a system upon which the ADM establishes and keeps a registry of tenancy contracts including all data related to the leased property which is known as the ADM's tawtheeq system. In addition, all tenancy contracts existing or entered between the parties after the implementation of this resolution shall be registered at the ADM. The tenancy contracts must be in English and Arabic or only Arabic language while registering it with the Tawtheeq registry system of the ADM.
Considering the above provisions, the ADM, shall only consider tenancy contracts registered under the provisions of this resolution, any transaction requiring a tenancy contract shall not be accepted and shall be dismissed if the contract is not registered in the tawtheeq registry system of the ADM. The resolution is applicable to all residential, commercial units and industrial units.
- Tenancy Period:
- There is no fixed tenancy period as per the law. This provision is subject to the contract made between the Parties. The custom practiced for the tenancy period of the residential properties has always been for one year and it would be renewed for the same period automatically. However, the terms specifically prescribed in the contract providing term of tenancy between the Parties shall be considered. For instance, the landlord may clearly specify in the contract that by the end of the tenancy he desires the tenant to vacate the property.
- The period may not be automatically extended if the landlord or the tenant has defaulted in performing their responsibilities under Tenancy Law. For instance, the tenant's failure to pay the rent due or the landlord's failure to hand over the property in good or in working condition.
- The landlord must send a notice for eviction to the tenant two months prior to the date of the tenancy expiry period in the case of residential properties; and three months prior to the to the date of the tenancy expiry period in the case of commercial, industrial or professional properties as per article 20(3) of the tenancy law.
- The following procedures must be adhered to:
- Ensure that the landlord has registered his property at ADM by reviewing the registration certificate.
- Seek the tenancy contract for your review. Examine all terms and conditions specially those pertaining to tenancy period, rental amount, maintenance and other fees.
Eventually, it should be noted that in case a dispute occurs between the landlord i.e. owner or real estate/property management company and the tenant, it would not be possible to submit dispute application to the Rent Dispute Settlement Committee unless the tenancy contract is registered with ADM tawtheeq system. Accordingly it is advisable to make sure that the tenancy contract is signed and registered. To state in précis, the Tenancy Law is a security for the rights of both the parties whether the party is the landlord (owner/ property management company) or the tenant.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.