What are the regulations for early termination of lease agreements in Dubai?

Early Termination of Lease Agreement in Dubai

Ending a lease agreement before its agreed-upon date is possible in Dubai, though it’s crucial to proceed with caution to prevent disputes.

Terminating a lease early, or ending a tenancy agreement ahead of schedule, is permitted and lawful. However, it’s essential to understand that the Dubai tenancy law does not explicitly address early termination provisions within the contract itself. Instead, the Dubai rental law governs the landlord-tenant relationship until the contract’s expiration.

Thanks to Law No. (33) of 2008, tenants can terminate their contracts early without facing penalties. All that’s required is to provide the landlord with a 90-day notice before vacating the premises.

The penalty for early termination is typically 1 to 2 months’ rent, which the tenant must pay to the landlord. However, it’s important to note that RERA does not specify an article for early contract termination. Therefore, any penalty or refund of prepaid rent depends solely on the landlord’s decision.

Before making the decision to terminate your tenancy agreement prematurely in Dubai, it’s important to consider these key factors:

1. Ensure the exit clause is included in your tenancy contract when you sign it. This provision can save you a lot of hassle if you need to terminate the agreement early.
2. If your contract doesn’t have an exit clause, reach out to your landlord to discuss the situation.
3. Provide a valid reason for wanting to break the lease agreement prematurely.
4. If your landlord agrees to early termination, they may request compensation before allowing you to leave the property.
5. You can propose to find a replacement tenant to ensure the landlord doesn’t face any financial loss.
6. If you’re unable to find a replacement tenant in time, be prepared to compensate the landlord for ending the contract early.

---

Tips for Early Termination of Lease Agreement

1. Check your contract for an exit clause. If there isn’t one, talk to your landlord.
2. Explain why you need to leave early and give enough notice.
3. Keep the property in good condition as per the law.
4. Manage your rent payments properly, especially if your landlord doesn’t accept post-dated cheques.
5. Review your contract carefully for any additional terms or conditions.

---

Things to Remember during early termination of lease agreement

Here are some important considerations to keep in mind when ending a lease agreement in Dubai:

1. According to Article (15) of Law No. (33) of 2008, tenants are expected to return the rental property in good condition. Landlords are typically responsible for major maintenance or repairs.
2. Rental payments in Dubai are commonly made through post-dated cheques, which are then given to the landlord. However, if your landlord prefers not to receive cheques, you can hand them over to the Dubai Rental Dispute Settlement Centre.
3. While standard tenancy contracts in Dubai are typically one page long, additional terms and conditions can be included through an addendum. It’s crucial to understand all terms and clauses, especially those related to potential increases in annual rent or payments for utility charges and repairs.

---

How will it impact if the tenancy contract lacks an early exit clause?

If your rental agreement doesn’t have a way to leave early, your landlord can ask you to pay for ending the lease early. They might ask you to pay for the remaining rent or some other kind of fee.

But you can talk to your landlord about it. Maybe they’ll understand and let you leave early if you pay two months’ rent or find someone else to rent the place instead of you.

---

Is it Possible for a Landlord to Terminate a Tenancy Contract Early?

As per Article 25 of the RERA Tenancy Law (Law No. 33 of 2008), a landlord can request early termination of a lease agreement for the following reasons:

1. If the tenant fails to pay rent or a part of it within 30 days of receiving written notification from the landlord, unless both parties agree otherwise.
2. If the tenant subleases the property without obtaining written approval from the landlord.
3. If the tenant engages in illegal activities on the property or allows others to do so.
4. If the tenant damages the property or makes changes that make it unsafe.
5. If the tenant uses the property for a purpose not specified in the lease agreement.
6. If the tenant fails to comply with any terms of the tenancy contract or the law within 30 days of being notified by the landlord.
7. If the property is in danger of collapse.
8. If the property needs to be demolished and reconstructed according to Emirate development requirements and government authorities’ instructions.
9. For commercial properties, if the tenant closes down their business for 30 or 90 consecutive days with a reasonable explanation to the landlord.

In all these cases, the landlord must notify the tenant through the Notary Public or by registered mail.

Ending your rental contract early in Dubai might seem daunting, but knowing your rights and following these tips can make the process smoother.

---