With rapid developments over the past decade or so, the Abu Dhabi property market is zooming right to the top in the region. The population is spoil for choice when it comes to renting a place to live in Abu Dhabi. Villas or apartments, high-end or mid-market, islands or mainland – there’s something for everyone. But what does it mean to be a tenant in Abu Dhabi? If you are a resident of the capital, here’s everything you need to know about Abu Dhabi tenant rights and the tenancy law in Abu Dhabi.
THE GROWTH OF THE TENANCY LAW IN ABU DHABI OVER THE YEARS
ABU DHABI TENANCY LAW AMENDMENTS
|2006||Abu Dhabi Law No. 20||Law Concerning leases and relationship between landlords and tenants introduced|
|2010||Abu Dhabi Law No. 4||Landlords receive legal rights to ask tenants to vacate – 5% rent cap established with no notice period required|
|2011||Abu Dhabi Executive Council||Rules and procedures of tenancy contract registration established|
|2012||Administrative Resolution No 12 & 13||Regulations for residential unit occupancy|
|2012||Abu Dhabi Executive mandatory two month’s notice period||5% rent cap retracted with a mandatory two months notice period|
|2016||Abu Dhabi Council Resolution||Tenants pay 3% housing fee to Municipality|
|2016||Abu Dhabi Executive Council No. 32||5% rent cap reinstated|
|2017||Tenancy Law Amendment of November 20 2017||Regulations for rental disputes|
The tenancy law governing Abu Dhabi tenancy contracts was laid out as Law No. 20 of 2006 followed by a series of amendments that reflect changing market conditions. Authorities have kept both the landlord and tenant rights in mind to ensure that both parties’ interests are protected under the tenancy law in Abu Dhabi. Law No. 20 of 2006 was passed to regulate issues like rental price and eviction policies. Prior to amendments that came later, landlords could not evict tenants upon expiration of the lease contract. Stemming from this original Abu Dhabi Tenancy Law, a number of changes have taken place to reflect various factors, bringing the tenancy law in Abu Dhabi to where things stand today.
TENANT RIGHTS UNDER THE TENANCY LAW IN ABU DHABI
Here are some general guidelines to help you understand tenant rights in Abu Dhabi.
The Abu Dhabi Executive Council No. 4 of 2011 requires landlords to register properties and effective tenancy contracts with the Abu Dhabi Municipality (ADM). ADM uses a system called Tawtheeq to keep a record of tenancy contracts and data related to the property being leased. The Abu Dhabi tenancy contract registration has to be in English and Arabic or only in Arabic for it to be accepted in the Tawtheeq registry.
The pursuant Administrative Resolution No. 97 of 2012 further standardized the registration process of lease contracts. The resolution mandates ADM to prepare a record of the Abu Dhabi tenancy contract registration which must contain data related to the property (residential, commercial or industrial units), along with landlord and tenant data.
According to the tenancy law in Abu Dhabi, all landlords are required to register their properties and consequent tenancy contracts with ADM. Tenants must always ask to see the property registration certificate when deciding to rent in Abu Dhabi.
ABU DHABI RENTAL PRICE CAP
The Abu Dhabi Tenancy Law saw its first amendment in 2010 with Abu Dhabi Law No. 4. The Law capped the annual rental price increases at 5% which meant tenants could face a rent increase of up to 5% at the time of lease renewal.
In 2012, the Abu Dhabi Executive Council issued law no. 32 which removed the rental price cap and allowed landlords to raise property prices as per market rates. However, the decree required landlords to provide two months notice to tenants stating the altered price.
Effective 13th December 2016, the Abu Dhabi Council reinstated the 5% rental cap on the lease agreement with Resolution No. 14 of 2016. Landlords and tenants can decide on the rental price and enter a lease agreement. The landlord can increase the price annually within the price cap set by this resolution.
Currently, the Abu Dhabi laws state that a 5% rental cap applies to leased properties in Abu Dhabi. Landlords and property management companies can increase annual rent within this limit, provided they notify tenants at least 2 months prior to contract renewal.
TENANT NOTICE PERIOD
Law No. 4 of 2010 entitles landlords to evict tenants when their tenancy contract expires. This legislation of the Abu Dhabi rental law also allows landlords to refuse renewal of the tenancy contract if they wish to do so.
A landlord can evict the tenant by giving 60 days’ notice prior to the end of the lease date. He/She no longer has to give a reason for this eviction. Similarly, if a tenant no longer wishes to renew the lease, a 60 days’ notice has to be given to the landlord stating that the lease will not be renewed.
The Abu Dhabi Executive Council Law No. 32 added to the Abu Dhabi rental law states that landlords have to issue an evacuation or tenant eviction notice two months before contract renewal. Following standard Abu Dhabi tenant eviction procedure, this notice period has to be served by both parties.
Under the Abu Dhabi property law pertaining to tenancy, landlords and property management companies in the capital have to give tenants 2 months notice for any amendments they wish to make to the tenancy contract. This applies to rent increase, eviction or changes to other tenancy contract terms.
OCCUPANCY IN ABU DHABI RENTAL PROPERTY
Administrative Resolution No. 12 of 2012 established certain guidelines for occupancy in Abu Dhabi residential units. Here are some of the restrictions that Abu Dhabi tenants need to be mindful of:
- The number of occupants is based on the total area of the apartment or villa. The area allocated to each occupant should be no less than 14 sq. m (excluding children and housemaids)
- Occupants should not use halls and corridors in residential units as bedrooms
- Landlords cannot divide a residential unit to lease separately without special permission
- A single room in the residential property cannot have more than three occupants living simultaneously (excluding children and housemaids)
- More than one family cannot share a single residential unit
- Families occupying a single residential unit cannot share it with persons who are not related to the family (children and housemaids excluded)
It is important to understand occupancy rights to make sure you don’t end up violating the Abu Dhabi laws. When in doubt, check with your agent or landlord.
ABU DHABI HOUSING FEES
Abu Dhabi tenants also pay a housing fee to Abu Dhabi Municipality, according to Abu Dhabi Council Resolution No. 13 of 2016. The housing fee is a standard 3% of annual rent and applies to all housing units in Abu Dhabi. It is payable to the Municipality, not the owners of the unit.
|Fee type||Fee amount|
|Abu Dhabi municipality fee||Approximately 2% of purchase price|
|Mortgage registration fee||0.1% of purchase price|
|Real estate agency fee||Typically 2% of the property value, plus 5% VAT|
|Bank mortgage arrangement fee||Usually up to 1% of the loan amount, plus 5% VAT|
|Title deed cost||AED 1,000|
|Bank property valuation fee||Ranges from AED 2,500 to AED 3,000, plus 5% VAT|
ABU DHABI RENT DISPUTE SETTLEMENT COMMITTEE
One of Abu Dhabi’s most tenant-friendly rulings is the formation of a dispute resolution committee which hears disagreements arising between landlords and tenants, thus giving tenants a fair voice in case of any conflict.
The Head of Judicial Department Resolution No. 10 of 2010 announced the formation of a Dispute Resolution Committee to resolve legal disputes and protect both landlord and tenant rights. The Committee will hear both ends of the disputes with claims and defenses presented by the litigant, witnesses and any other person. Hearings generally take place in Arabic, with an interpreter provided for those who don’t speak the language.
HOW TO FILE RENTAL DISPUTES IN ABU DHABI?
An Abu Dhabi Rent Dispute goes through 5 key stages:
STAGES OF RENTAL DISPUTES IN ABU DHABI
- Stage 1: Arbitration and Reconciliation Departments – Landlords and tenants convene to resolve the dispute when one party files the complaint.
- Stage 2: Court of First Instance – The court will hear claims brought forward by parties in the form of a memorandum.
- Stage 3: Court of Appeal – An appeal can be filed here, after the Court of First Instance passes judgement withing 15 days only for claims exceeding AED 50k.
- Stage 4: Court of Cassation – Cases valued at AED 330k or more can be filed within 30 days after the Court of Appeal passes judgment.
- Stage 5: Enforcement Department – The party with the favorable judgment can pressure the other party to settle through legal means.
The most recent amendment to the Abu Dhabi Tenancy Law on 20th November 2017 states that the decision of the Abu Dhabi Rent Dispute Settlement Committee (RDSC) will be final and binding upon the involved parties. If the dispute claim amount exceeds AED 50,000, either party can file an appeal within 15 days from the day of judgement. Parties can file an appeal for claims exceeding AED 300,000 before the Court of Cassation within 30 days.
The legislation also states that to submit a dispute application to the Committee, the tenancy contract must be registered in the Abu Dhabi Municipality’s Tawtheeq system.
The Committee can ask tenants (of two years or more) to vacate the leased property if the landlord suffers damages due to the tenant’s occupancy. Legally, the landlord can allow up to six months for the tenant to leave the rented apartment or villa.
HOW TO FILE A RENT DISPUTE WITH RDSC? (ACCORDING TO ABU DHABI DIGITAL GOVERNMENT)
- Submit the application along with the required documents at the customer service desk in RDSC
- Fill in the complaint form at the customer service desk
- Pay the fees at the finance counter and receive a receipt
- Receive a date for the first case session
Documents required: Original RDSC application, Original Petition with 2 copies, Copy of Tenancy Contract, Passport Copy, Trade License (in case of a business party), and Original Power of Attorney (in case the principal is acting on behalf of another party)
Fees: 4% Annual Rent (max. AED 10,000), Local Newspaper Advertisement Cost (if the defendant fails to show up), Other Fees (expert consultation, the fee for rent deposit with RDSC, etc.)
If you need to file a dispute claim, contact Abu Dhabi RDSC on 800 2353. The Abu Dhabi Rent Dispute Settlement Committee is located on Defence Street (opposite Algfah Hotel), near Marriage Fund. There is another branch in Al Ain, located inside Al Ain Court.
The Abu Dhabi property law for tenants has seen many amendments over the years. Here are the most important things to keep in mind if you are a tenant in Abu Dhabi:
- Ask to see a registration certificate to make sure the property is registered with the Municipality
- Review the terms and conditions of the tenancy contract carefully. Pay special attention to the tenancy period, rental amount, maintenance, and other fees
- To renew, modify or terminate the contract, you should notify your landlord two months before contract renewal. This is the standard tenant notice period
- If you find yourself in a legal dispute, raise it with the Abu Dhabi Rent Disputes Settlement Committee
- Your landlord cannot raise the annual rent at a rate higher than 5%
- Your landlord has to give you a two months’ notice in case of eviction, rent increase or any other change to the tenancy contract terms
The Abu Dhabi property law for tenants is standard for the most part. It helps to know what you can or cannot do as part of your contract with your landlord. Keep all of the above in mind before signing a tenancy contract to avoid any complications down the lane.
The capital has taken some important steps to ensure all the stakeholders are protected in the Abu Dhabi real estate market. With such standardization coming into place, more people can invest and rent with confidence, elevating the overall popularity of the market.