Cancelling Lease Contract Before its Expiry in Dubai

Jan 12, 2022

Before signing the lease contract, the tenant must review its terms in detail and understand their rights, including the mechanism of regulating the lease contract and the necessary matters to be included, as well as what the new lease contract entails and how it affects both landlords and tenants. Before discussing terminating the lease contract before its expiry in Dubai, it is necessary to address some important points. Follow along with us to learn about them.

Landlord and Tenant Rights

Landlord's Rights

The landlord undertakes to deliver the leased property in a habitable condition as specified in the contract terms. However, in rare cases, it may be agreed to deliver and lease a property despite its incomplete construction, with the tenant being responsible for completing the deficiencies. Article 15 of the Rent Law determines which party bears the cost burden of completing the property.
As per Article 16, the landlord is responsible for maintaining the property and repairing any faults or defects that affect the tenant's way of living during the lease period, unless otherwise agreed by both parties.
The landlord is not allowed to make changes or renovations to the property that would affect the tenant's use of the property as specified in the contract, with the consideration that Article 17 allows the landlord to carry out renovation works provided they obtain the tenant's approval.

Tenant's Rights

Article 19 of the Lease Law stipulates that the tenant must obtain permission from the property owner, in addition to the necessary permits from the relevant official authorities, before carrying out any renovation works on the leased property.
Article 23 of the Lease Law obliges the tenant to deliver the leased property with all the improvements made to it, without the right to remove them.
Article 21 of the Lease Law states the responsibility of returning the property to the landlord in the condition it was received, except for damages resulting from normal use or reasons beyond the tenant's control. In case of any dispute, it can be referred to the Rental Disputes Settlement Committee.
Article 20 of the Lease Law obliges the property owner to refund the security deposit deposited by the tenant. If the owner refuses to refund the full amount or part of it for invalid reasons, the tenant can escalate the dispute to the Rental Disputes Settlement Committee.
Article 22 of the Lease Law requires the tenant to pay all costs and taxes due on the use of the property to government authorities, as well as any fees or taxes imposed on subleasing, unless the lease contract states otherwise.

Terminating a Lease Contract Before its Expiry in Dubai

Article 13 regulates the relationship between landlords and tenants in the Emirate of Dubai. If either party wishes to amend the terms of the lease contract, they must notify the other party at least 90 days before the contract expires, unless the parties agree otherwise.

The property owner is not obligated to refund any rent payments to the tenant if the latter decides to vacate the property before the lease contract expires unless the contract includes a specific clause allowing the tenant to terminate the lease before its expiry. There is no law or decree governing early termination of lease contracts in Dubai. Instead, the tenant must request the inclusion of a clause in the lease contract specifying the notice period and the applicable penalty for cases of lease termination before its expiry in Dubai.

Termination of Lease Contract Before its Expiry is subject to the following conditions:

Explicit agreement in the contract on the permissibility of contract termination before the end of the term. Hence, the lease contract here is terminated by the will of the parties without resorting to judiciary and courts.
If the tenant delays in paying the rent, the landlord can request contract termination, but through legal action. This means that the landlord must file a lawsuit and obtain a judicial ruling to terminate the lease contract.
Using the leased property in a way that damages it or leasing the property under a different name, here also the landlord has the right to request termination of the lease contract, but after obtaining a judicial ruling to that effect.
Making changes to the property that affect its safety or cause damage in a way that makes it impossible to return it to its original state.
Using the property for a purpose other than the one leased for.
Increasing the rent amount before the expiration of two years from the date of signing the contract.
The property being prone to collapse, provided that the lessor proves this with a technical report issued by the Dubai Municipality or approved by it.
The tenant's failure to comply with legal obligations or any of the contract terms.
Demolition of the property for urban development purposes by the competent authorities.

Things to Consider Before Terminating a Lease Contract by Both Parties

Reviewing the Contract Terms

Prior to terminating the lease contract, it's essential to review and ensure the inclusion of an early termination clause in the lease agreement, as its presence saves a lot of discussions and arguments on this matter.

Communicating with the Property Owner and Proposing Mutually Acceptable Solutions

In the absence of an early termination clause in the lease contract, it's possible to communicate with the property owner, explain the reasons necessitating the termination of the lease contract before its expiration in Dubai, and reach solutions that satisfy both parties:

Find an alternative tenant
Pay a certain amount as compensation for the remaining months of the contract

It is noteworthy that in the event of terminating the lease contract before its expiration in Dubai, the electronic lease contract must be canceled, while if the lease contract ends due to the expiration of its specified period, the lease is automatically canceled.