Here’s how to terminate rent contract early without paying fines in UAE

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As Covid-19 in UAE continues to cause massive lay-off, majority are planning to go back to their home country and avail of the repatriation program. You might also want to consider the fines you’re incurring when you end your rental contract earlier before flying home.

However, did you know that you can end your rent contract early without paying any penalty?

Renting an apartment in Dubai is governed by Law No. 26 of 2007 Regulating the Relationship between Landlords and Tenants in the Emirate of Dubai (Dubai Tenancy Law) and Law No. 33 of 2008 Amending Law No. 26 of 2007 Regulating the Relationship between Landlords and Tenants in the Emirate of Dubai (Amended Dubai Tenancy Law).

And due to the Covid-19 pandemic, the provisions of the Federal Law No. 5 of 1985 on the Civil Transaction Law of the United Arab Emirates (Civil Transaction Law) may apply, too.

Under normal circumstances, 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.

“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 under the provisions of this law,” Article 7 of the Dubai Tenancy Law read.

Additionally, in Article 4 (1) of the Amended Dubai Tenancy Law and Article 19 of the Dubai Tenancy Law it stated as a tenant, he or she should fulfill the obligations mentioned in the tenancy contract and may have to pay two months’ rent as penalty for early termination of the contract.

However, due to Covid-19 pandemic and current economical situation, authorities have urged both landlords and tenants to come to an agreement related to changes in the terms of the existing tenancy contract.

The best case scenario is when both parties 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.

If the landlord does not agree, one can bring this concern to the Rental Dispute Centre in Dubai and file a formal complaint against him for not agreeing on the early termination of contract without payment of any penalty.

In order to do this, one should prepare a copy of termination letter. The RDC will then decide if they will accept or terminate the tenancy contract without paying any penalties.

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