Dubai, UAE

Early termination of tenancy contract and claiming compensation from tenant

I have a tenant in JBR for many years who is paying rent in 2 payments.

The 2nd payment was due 1/3/18 but he delayed it and has now sent me the payment for only 4 months, as he wants to leave at end of June as per the clause below.

The contract states:

6. If the tenant would like to terminate the tenancy agreement prior to the contract end date, three months written notice must be given by the tenant and the tenant will be required to pay the equivalent of one month's rent as compensation to the landlord with all remaining rent returned to the tenant.

7. If clause 6 is invoked, the tenant will be refunded his/her remaining rent (excluding the one-month penalty) and the security deposit depending on a move-out inspection report of the property.

My point is that he should have paid the full 6 months rent installments on the 1st of March and he would have received a refund of only 1 month after moving out.

Do I have any grounds to take action against him?

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Ahmed Elnaggar

Elnaggar & Partners

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25 Mar 2018, 05:04

First, we have to highlight that without seeing the terms of the agreement, our advice is indicative and not to be considered final.

Second, rents are usually guaranteed with post-dated cheques. Seems to me that it is not the case here and that is why you have no control over the funds.

Third: you should make a calculation based on the termination clause and if the paid 4 months are correct, it should not matter if he paid and you deduct or the opposite.

You only have grounds if you are denied a certain amount, not because of the method of payment or deduction.

Regards,

Ahmed Elnaggar

25 Mar 2018, 10:09

Hi,

I have put the extract from the contract in my question above. Points 6 and 7 apply. He is paying by wire transfer as I am not in Dubai.

Surely it is clear from points 6 and 7, right?

I am concerned that I will not receive my 1 monthly compensation payment that is due if he gives notice.

Therefore he should have paid the full installment on 1st march before he gave notice or at least paid 5 months including the penalty.

25 Mar 2018, 11:08

This is not a legal concern I see. It is a mathematical one maybe :)

As per articles 6 and 7 he should pay you the rent for each month he stayed plus one month's compensation knowing that he MUST notify you 3 months ahead "Which I understand he did".

25 Mar 2018, 17:16

As he has not paid the compensation, are there any legal grounds?

Also, shouldn't the rent be paid as the full installment if it's supposed to be 2 cheques?

3 Apr 2018, 10:39

I do not see any legal grounds not to pay the compensation which is an agreed term in the contract.

The rent should be paid in one full installment in case it is not interrupted and not terminated mutually.

So, in the end, you have left yourself exposed without a guarantee for the payment of the rent unlike the market practice but seems to me that the tenant is trying to bypass the contractual obligations by not paying the 1 month penalty unless all the above are just assumptions.

You have the right to file a case against the tenant for compensation as per the terms of the contract.

I would recommend you to look at the economical sense of such a decision because you might end up paying more money than what you claim to recover the 1-month compensation.

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