Abu Dhabi is an amazing place to live and work. The Capital of the United Arab Emirates (UAE) is a bustling metropolis filled with amazing sights to see, including the Louvre’s new outpost and the grandeur of the Sheikh Zayed Grand Mosque.
The Emirates weather gives you the opportunity to enjoy your place in the sun on an island in the beautiful Persian Gulf. Abu Dhabi is also a hub for the region’s business as well as a major culture and commerce center.
These factors have made Abu Dhabi real estate some of the most desirable places to lease for people from all over the world.
If you’re thinking about moving to the capital of the UAE, it’s a good idea to have a full understanding of the tenancy laws in Abu Dhabi.
We’ve already written out a full guide to leasing in Abu Dhabi, but to make things as clear as possible, we’ve also put together a full explanation of the tenancy laws in Abu Dhabi.m
Tenancy Laws in Abu Dhabi
Leasing in Abu Dhabi is primarily regulated by Law No (20) of 2006 Concerning the Rent of Places and Regulating the Rental Relation Between Landlords and Tenants in the Emirate of Abu Dhabi, also known as the “Tenancy Law.”
There are a few rental restrictions that apply to all properties in Abu Dhabi:
● The area allocated for each occupant cannot be less than 14 m². Children and housemaids are excluded from this restriction.
● Hall and corridors may not be used as bedrooms.
● No more than one family may occupy a single residential unit.
● Bachelors may rent a property only if there are no more than three men living in one room.
● Landlords cannot divide a residential unit to lease separately without special permission.
The Rental Contract
The first step in renting a property in Abu Dhabi is signing a rental agreement, also known as a Tenancy Contract. The Tenancy Contract is an agreement between the landlord and the tenant, normally containing the following:
An Agreement of the Length of the Tenancy
Under Abu Dhabi law, there is no specified minimum or maximum length for a period of tenancy, although this is usually at least one year. The term of a lease will remain in force until its expiry, at which point it may be renewed with the mutual consent of both parties.
If, after the lease ends, the tenant stays in the property with the knowledge and consent of the landlord, the lease is considered to have been renewed for the same term as the original with the same terms and conditions, unless one of the following circumstances comes into play:
● The landlord clearly stipulates in the contract that the tenant is to vacate the premises after the end of the tenancy period.
● Either the landlord or the tenant fails to fulfill their stipulated obligations. Such failures can include non-payment of rent or a failure to maintain the property in a habitable condition.
● The landlord issues a Notice for Eviction (NOE) to the tenant. The NOE must be issued two months before the lease expires on residential properties and three months in advance of the lease expiring on commercial, industrial, or professional purposes.
Vacating the Property
If either party does not wish to renew their lease, they must give two months’ notice of that fact for residential properties or three months for commercial properties.
Under Law No. (4) a landlord is entitled to request that a tenant vacates a property on expiry of his lease and may refuse to renew that lease.
The Rental Price
The contract should clearly state the rental price of the property. This price usually sits within the range of the Rent Index.
Under the Landlord and Tenant Law, the rental amount can be fixed by agreement in the lease. If the rent is not fixed, the landlord has the right to an annual rent increase.
Furnished or Unfurnished
Properties will come as either furnished or unfurnished. Furnished properties will normally include provisions for the upkeep and maintenance of the furniture and what happens in the event that there are any damaged.
Unfurnished properties will usually include provisions on the removal of the tenant’s furniture when the lease ends.
This section of the agreement will specify how and when rental payments will be made. Rental payments in Abu Dhabi are normally made in one or two upfront payments or in quarterly installments.
Registering Your Rental Contract
Once you’ve agreed on the terms and conditions of your rental agreement with your landlord, the contact may need to be registered with the Abu Dhabi Municipality (ADM).
If you are dealing directly with a landlord, it is best to check that they have registered their property with the ADM. If they have, they should be able to present you with a property registration certificate.
You’ll also want them to draw up a contract for your review so you can check over all the details. If you both agree on the terms of the contract, the landlord does not need to register the contact with the ADM.
If you are leasing through a property management company, you will need to go through the following steps to re-register the contract with the ADM:
● Your chosen property management company will collect your passport and submit it, with the residency details and agreed rental amount, to the ADM.
● The ADM will then issues a confirmation letter to the property management company, agreeing that the tenancy can go ahead.
● All involved parties then sign the rental agreement and it is sent to the ADM to be registered.
As of December 2016, the 5% rent cap was reinstated by Resolution No. 14. This resolution caps the maximum possible rent increase, at the point the lease is renewed, at 5% of the existing rental amount.
The tenant has the right to appeal to the Abu Dhabi Rent Committee if the landlord demands a rent increase of more than 5%.
The tenant must be informed of rent increases two months in advance of the end of the lease for residential properties. This period is increased to three months in advance for commercial, industrial, or professional properties
Most rental disputes can be escalated to the Dispute Settlement Committee (RDSC). It should be noted that the RDSC does not cover rent increases.
Disputes are handled in a five-stage process:
Arbitration and Reconciliation – Where the landlord and tenant are encouraged to come to an amicable settlement.
Court of First Instance – This court makes the initial judgment on any case that fails to be resolved through arbitration and reconciliation.
Court of Appeal – Judgements issued by the Court of First Instance can be appealed if the claim is worth more than AED 100,000.
Court of Cassation – This court specifically deals with disputes related to any property that is valued over AED 500,000.
Enforcement Department – This final state enforces the decisions made by the Court of First Instance and Court of Appeal.
Finding the Property of Your Dreams in Abu Dhabi
If you’re interested in leasing in Abu Dhabi and want to dedicated team of professionals to help you find the right property for you, we’re here to help.
Our specialist Sales and Leasing Team is standing by to provide you with personalized and professional assistance to help you find your new home.
Call us toll free on 800DRE (373) to speak to one of our consultants.