As in Switzerland, tenants in Dubai can be given notice to vacate for certain reasons. The reasons include violations of the rental law, such as non-payment of rent or a general violation of the terms of the rental agreement (illegal activities or causing significant damage to the property). Another reason for termination is a mandatory renovation. However, written confirmation from Dubai Municipality is required for this.
However, the most common reasons for termination include registering for personal use or selling the property. To ensure that you are legally protected and the termination is valid, the termination must be notarized and delivered to the tenant by courier. The notice of termination is subject to a 12-month period from the date of delivery of the notice, so that the tenant has sufficient time to find an alternative.
If the reason for termination is personal use, the landlord is obliged to move into the property himself (or have relatives move in) after the 12-month notice period has expired. Re-letting is not permitted for the next three years. This protects the tenant and the Termination Act cannot be abused to get rid of the tenant.
The situation is similar in the case of termination for sale. Here too, the owner is obliged to sell the property. Likewise, the owner may not "re-let" the property until it is sold, even if the tenant terminates the contract prematurely. If the owner violates this termination law, the tenant can sue for damages.
Why is a tenancy agreement allowed to be terminated due to a sale? Purchase and rental prices have risen sharply in the last three years. However, as rental prices are regulated by the Dubai Land Department and the rental price can only be increased by a certain percentage each year, it is particularly difficult to bring very old rental contracts (i.e. poorly rented apartments) up to a current market price. As a result, there are more and more properties that are let far too low compared to the current rental market. This makes it more difficult to sell the property and naturally pushes the selling price down. Therefore, such property owners have the option of terminating the rental agreement due to the sale.
A hotly debated topic is the question of whether the property owner may only sell after the notice of termination has been served (i.e. after 12 months) or whether they may do so during the notice period and the new owner takes over the termination. In principle, it must be assumed that the notice of termination is automatically taken over by the new owner. However, it is precisely this constellation that has been the subject of much discussion in recent months. Last year, there were various rulings that ruled in favor of the tenant and thus rendered the transfer of the notice of termination to the new property owner null and void. As a result, this practice was hotly debated and was also a decisive criterion when it came to real estate transactions and their timing. Last year, we also had several cases that directly confronted us with this situation and required us to find specific solutions.
This year, however, there have been several rulings in favor of the landlord, meaning that the notice of termination is transferred to the new owner upon sale. As new and upcoming cases mostly refer to old rulings, it can be assumed that this case law will now apply. However, you should still find specific solutions and secure yourself with additional documents. We will be happy to help you with precisely such cases.