UAE Property: ‘My tenant is refusing to pay the rent’

Question: My wife and I bought an apartment last November with a tenant in situ. We initially thought the monthly rent had to be collected from the previous owner, who was a builder, but recently came to know that the previous tenancy contract expired last September. We don’t know if the previous owner extended the contract . The previous owner had served the tenant a one-year eviction notice last July for the purpose of selling the property. When we were in Dubai to take ownership of the property, we had given 24 hours’ notice through the building management to the tenant to view the unit . But he didn't open the door or respond to our calls. The builder then suggested that we sign a new one-year contract with the tenant and send a separate eviction notice. We then invited the tenant to sign the new contract and hand over the cheque, but he did not turn up. Finally, I called the tenant and asked him to sign the contract soon as I need to file my tax in Europe based on worldwide investments. The tenant was very rude and said he could get the new lease signed by the Dubai Land Department and asked me to visit Dubai to collect the cheques. We wish to evict the tenant as early as possible, if possible with 30 days’ notice, since he is not paying the rent. Could you please help? SS, Europe Answer: I can only advise you on your rights and what to do given your circumstances. A tenant cannot reside in a property without paying rent. Therefore, you can file a case at the Rent Dispute Settlement Committee and, ordinarily, the court will then give the tenant 30 days to rectify the situation. Despite the tenant being somewhat belligerent, if he pays within the time given, you will not be able to evict him because the act of paying eliminates the misdemeanour. I realise this is probably not what you want to hear, but these are the facts. If you want to evict the tenant, you can do so by giving 12 months’ notice for one of these four reasons: Another way is to sign an agreement for financial compensation if you want the tenant to move out. But this agreement needs to be in place, otherwise the four reasons listed above will be taken into consideration to start an eviction. Q: Does the DLD have a different approach to evaluate rent for an occupied property versus a new lease? My landlord wants the DLD to do a rent valuation on the unit I occupy as new leases in my building are now worth around Dh250,000, while I am currently paying only Dh150,000. Will the DLD consider the fact that we are talking about a renewal or apply rates applicable for a new lease instead? ET, Dubai A: Rental rates for existing tenancies at renewal are looked at from a different perspective than vacant properties on the open market. The Real Estate Regulatory Authority’s rental calculator is used to determine the new rental amount a landlord can charge an existing tenant at the time of renewal. It is important to note that at least 90 days’ notice has to be given for any changes to the existing contract and this can mean a change of rent, too. Sometimes landlords use the DLD’s valuation service to push up the rent value, but even this is capped at a maximum of 20 per cent increase in one year. This follows Decree 43 of 2013, which states the maximum rent increase that can be quoted in any one year. The DLD, therefore, will always look at your lease as an existing one, and not compare it to new lease rates in the same building. Mario Volpi is the sales director at AX Capital. He has worked in the property sector for 40 years in London and Dubai. The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to m.volpi@axcapital.ae