Homefront: ‘Should I pay rent if there is no tenancy contract in place?’

At the beginning of 2019, I rented an apartment in Abu Dhabi through a property management company that claimed to represent the owner. I paid the security deposit, agency commission and rent to this company.

Soon after I moved in, I received a letter from the owner’s mortgage company stating that a sub-lease is not permitted without their consent and that he’s in violation of material obligations for this unit (he’s not paying his mortgage).

When I called the number on the letter to inquire about the notice, I was told by the mortgage company that my tenancy contract is valid until the end of the year.

At the end of the contract, I reached out to the property management company to get a refund of my security deposit. They refused, claiming that they would need a letter from the bank to refund the amount. They stopped replying to any communication thereafter.

I reached out again to the bank representatives on what I should do and was told that they are not responsible for the unit until repossession is complete in court. They told me to stay in the unit and said they would reach out to me once they have the title deed, presumably within a couple of months.

I followed up with them regularly to get updates and there was very little communication. In December 2020, I received an email from the bank to say that it wanted to renew the agreement with me. They want me to pay last year’s rent (for the period they refused to be responsible for the property) and they’ve sent me a court eviction notice that is to be enforced in a few days.

They are aggressively pushing me to pay last year’s rent in full even though there was no agreement. They refuse to delay the eviction unless I agree to their terms. Can they push me into this corner even though I did nothing wrong?

I'm willing to settle an amount for last year's rent, but the bank is not willing to compromise and is threatening to come after me in court if I don't pay what they want. OA, Abu Dhabi

A rental contract automatically renews under the same terms and conditions as before, unless there is written consent of any changes by the parties. The fact that there is a dispute between the landlord and his bank will not alter your rental agreement (unless otherwise agreed). This is why you have been allowed to stay in the property all this time.

As in any contractual agreement, there has to be consent between the parties. So if they are now looking to alter the original rental agreement for the rental period you stayed, you have the right of refusal if it is different from the original terms.

If they are asking you to pay on the same terms and conditions as before, this is correct and you would indeed owe this as rent for the year you stayed.

It is obvious that you cannot live in any property free of rent. Going forward, I advise you to organise a face-to-face meeting with the bank to discuss the issue and iron out any differences.

Mario Volpi is the sales and leasing manager at Engel & Volkers. He has worked in the property sector for more than 35 years in London and Dubai. The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to mario.volpi@engelvoelkers.com