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You can now terminate your rental contract if you lose your job (COVID-19)

23-06-2020

Pre-COVID-19, the termination of the rental contract required the lessee to submit a few months’ notice to the landlord, pursuant to which the lessee expresses his desire of not renewing the contract.

However, the situation has changed Post-COVID-19, where today it is possible to terminate rental contracts in the event of job loss. 

In a recent Judgment, Dubai Rental Dispute Center (RDC) confirmed that rental contracts could be terminated due to: (1) Force majeure (unpredictable circumstances and unforeseen situations effect that cannot be reasonably anticipated) or (2) Emergency Circumstances.

The Judgment
The Rental Dispute Center declared job loss due to Covid-19 an ‘’Emergency Circumstance’’, as such, the RDC allowed the lessee to terminate the contract, which it noted had become burdensome to the extent that it is impossible to continue with the lease agreement. This judgment also relieves tenants from paying any penalties and advises landlords to return the advance cheques. 

What’s new? 
Pre-COVID-19, tenants could not terminate a rental agreement on grounds of job loss, nevertheless, the new judgment shall allow to doing so henceforth. 

In the event of job loss, the tenant should take his termination letter to the landlord, express his desire to terminate the rental contract, and explain how he is unable to continue with the contract. The landlord shall accept or reject the request. In the case of rejection, the tenant can reach out to the Rental Dispute Center of his Emirate, which will assess if the tenant is in the capacity to fulfill his obligations, the judge will then terminate the rental agreement. However, each case can differ and the tenancy history may affect the judgment. 

How to file a case with the rent dispute center? 
First, the tenant needs to file a complaint at the RDC against his landlord. The RDC has a form to fill. 

Second, the tenant shall provide the necessary documentation such as ID documentation, lease documents, Ejari certificate, tenancy contract, DEWA bills. 

The fee to lodge the complaint is 3.5% of the annual rent of the property and must be at least Dh500 and not exceed Dh20,000. This fee is exclusive of administrative and translation costs. 

Upon lodging the complaint, the RDC will settle the matter within 15 days. If the dispute is not resolved, it will be then transferred to a lawsuit.