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COVID-19: You can terminate your rental contract if you lose your job


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COVID-19: You can terminate your rental contract if you lose your job- Dubai Rental Dispute Centre

Judgment by rent dispute centre terms employment termination as 'emergency circumstance'
If you have lost your job, it is now possible to terminate your rental contract in Dubai.
A recent judgement by Dubai's Rental Dispute Management Centre (RDC) confirmed that leases can be terminated in two cases.
1. Force majeure (unforeseable circumstances that prevent someone from fulfilling contract-or
2. 'Emergency circumstances'

What was the judgement?
In the case before the rental dispute centre, the claimant was unable to complete the contract due to loss of job.

The RDC ruled that the claimant's case came within 'emergency circumstances'
It became impossible for the claimant to continue the lease, according the centre's judgement.

What does it mean for the tenant?
This is a significant finding as the termination of employment is deemed to meet the criteria of 'exceptional circumstances' events.

Earlier, tenants could not cite job loss as a reason to terminate a rental agreement.
It would be best for the tenant to approach their landlord directly to inform them of the job loss and request for lease termination.

Get your dues cleared, whether it is the water and electricity bill, or any other service charge and request for lease termination.
Your landlord may agree to terminate the lease. If not, you can reach out to the rental dispute centre.

Each case varies and the judgement, too, can depend on various factors.
What can go against the tenant? If you have a good record as a tenant, paying your rent on time, the good record will work in your favour.

But if you have a history of missing rent or other disputes with your landlord, these can go against you.

How to file a rental dispute in Dubai.
Dubai
Rental Dispute Centre
Dubai Land Department
Baniyas Road, Dubai
Call Centre: 800 4488

How to file a rental dispute in Abu Dhabi.

Abu Dhabi Rent Dispute Settlement Committee
Defence Street
Call Centre: 800 2353

How to file a rental dispute in Sharjah.
Sharjah Rental Dispute Committee
Rent Regulation Department, Near Sharjah Cricket Stadium
Call: 06 593 1525

How to file a rental dispute in Ajman.
Ajman Rent Dispute Committee
Al Rashidiya 3, Ajman
Call: 06 744 8884
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How to end rent contract early in UAE without penalty amid Covid-19
A landlord or a tenant may not unilaterally terminate the tenancy contract and it may be terminated mutually by the landlord and the tenant during the term of the contract. This is in accordance with Article 7 of the Dubai Tenancy Law, which states: "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."

The terms and conditions mentioned in the tenancy contract is applicable to both the landlord and the tenant. This is in accordance with Article 4(1) of the Amended Dubai Tenancy Law, which states: "The contractual relationship between a landlord and tenant will be regulated by a tenancy contract detailing, in a manner allowing no room for uncertainty, a description of the leased real property, the purpose of the tenancy, the term of the tenancy contract, the rent and payment method, and the name of the owner of the real property, if the landlord is not the owner."

Further, Article 19 of the Dubai Tenancy Law mentions that the tenant must pay the rent on due dates. In the event of non-payment of rent by the tenant, the landlord may seek the tenant's eviction in accordance with Article 25(1)(a) of the Amended Dubai Tenancy law.

Based on the aforementioned provisions of law, as a tenant, you should fulfil the obligations mentioned in your tenancy contract and you may have to pay the two months' rent as penalty for early termination of the contract. However, due to the current Covid-19 pandemic, local authorities have urged both landlords and tenants to come to a consensus related to changes in the terms of the existing tenancy contract.

Both the landlord and the tenant may mutually agree to a reduction in rent; early termination of the tenancy contract; rent-free period options; or any other concessions on the grounds of the pandemic.

The Dubai Tenancy Law and the Amended Dubai Tenancy Law are silent in relation to the termination of the contract due to force majeure. In simple words, force majeure means 'unforeseeable circumstances that prevent someone from fulfilling a contract'.

The pandemic may be considered as an unforeseeable circumstance and, therefore, based on this, you may be able to terminate the tenancy contract with your landlord unilaterally. This is in accordance with Article 273 (1) of the Civil Transactions Law which states: "In contracts binding on both parties, if force majeure supervenes which makes the performance of the contract impossible, the corresponding obligation shall cease, and the contract shall be automatically cancelled."

If the landlord does not agree with your request, you may approach the Rental Dispute Centre (RDC) in Dubai and file a complaint against your landlord for not agreeing on the early termination of your tenancy contract without payment of any penalty.

The RDC may accept your complaint and may terminate your tenancy contract without payment of penalty to the landlord. This is in accordance with Article 249 of the Civil Transactions Law, which states: "If exceptional circumstances of a public nature which could not have been foreseen occur as a result of which the performance of the contractual obligation, even if not impossible, becomes oppressive for the obligor so as to threaten him with grave loss, it shall be permissible for the judge - in accordance with the circumstances and after weighing up the interests of each party - to reduce the oppressive obligation to a reasonable level if justice so requires, and any agreement to the contrary shall be void."
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