Rental Disputes Center rules to have AED 455000 refunded to a tenant having unable to use the property after issuing the rental cheques
The Dubai Rental Disputes Center has issued a judicial verdict to refund the amount of AED 455,000 to a tenant claimed against a real estate property owner. The tenant did not use the leased premises after issuing a cheque of AED 350,000 for rent and another cheque with the amount of AED 105,000 as guarantee.
The RDC judicial committee stated in its ruling, perused by the Emarat Al-Youm, to dismiss the landlord’s claim of fining the tenant with two months’ rent over terminating the lease prior to the expiry of its tenancy term as the dispute between the two parties occurred before the tenancy contract came into force.
Real Estate Readiness
Briefing the above, the Rental Disputes Center, the judicial arm of the Dubai Land Department, reported that a company had leased a residential building to accommodate its staff in the emirate, but at the beginning of the lease the tenant (the company) was surprised that the property was not ready for living, which affected the staff and their performance at work.
The tenant explained in its lawsuit lodged with the RDC, that the leased premises was not ready for moving in, owing to a number of reasons, including issues associated with water supply, as well as the lack of air conditioners, in addition to the leakage of water in rooms and washrooms.
Monetary Claim
The documents submitted by the tenant show that the value of claim amounts to 455,000 dirhams, including the amount of a rental cheque of 350,000 dirhams, and a guarantee of 105,000 dirhams.
On the other hand, the landlord claimed the tenant two months' rental amount over early termination of the lease, as well as a rental allowance for the period he had given the tenant before the lease came into force.
Termination Penalty
However, the RDC stated that the judicial committee hearing the case rejected the landlord's claim of fine for termination after the tenant (the company) submitted proof stating his complaint about the leased property had preceded the effective date of the lease. The judicial committee noted the landlord had based his request for termination penalty on clause (5) of the terms and conditions set out in the lease, which stipulated, "a two-month notice must be given prior to termination of the lease together with charge of two months’ rent.”
The RDC explained that since pacta sunt servanda (“agreements must be kept”), and the current lease was limited to a period starting from a certain date, which was a date later than the period claimed by the owner. The judicial committee ruled to reject the property owner's claim of obligating the tenant to pay the termination penalty.
Rental Amount
As for the owner's claim of rent amount for the term occupied by the tenant before the start of the rental relationship, the committee has also rejected it, as the plaintiff (the tenant) handed the property over to the defendant having occupied it before the date of the lease, and without any specified rent. The committee, therefore, considers it a grace period free of rent the landlord is not entitled for it and the committee rejects it.
Judgment
Hence, the RDC judicial committee delivered its ruling that the tenant’s claim of AED 455,000 should be met by the landlord.
The tenant paid a rental cheque of AED 350,000 and a guarantee cheque of AED 105,000.
The tenant asserted that the leased premises was uninhabitable owing to a number of reasons, including problems with water and air conditioning.