Dubai's Amlak threatens to tear up tenancy contracts

His Excellency Dr Paul Sunday, 10 February 2013 6:47 PM - Dubai UAE

Whether this is legal or not isn't really the point. It's long been clear that contracts in the UAE are worthless if you're the little guy as countless thousands of property investors found out. Now it seems that even legitimate tenancy contracts are worthless too.

The place has learned nothing from its near collapse and bailout. It's still a free-for-all by greedy corporations to milk, decieve, abuse and exploit people, with no meaningful consumer protection at all.

I guess this is why the marketing now is all targeted at refugees from war zones and countries facing economic embargoes. Far easier to convince them it's a step up, and not a shark-infested pool.

Richard P Thursday, 31 January 2013 2:27 PM - UAE

There are too many people commenting on this site with a small grasp of the law or often not bringing in their home country's interpretation of property law.

Some people have boldly stated the actions of Amlak are against the law. If it is, I would be interested to know exactly to which UAE law you refer.

I will agree that the law is not clear enough and not understood enough by the general population. But ignorantia legis neminem excusat (ignorance of the law excuses no one).

And no. @landlord I am not being self-righteous. I am clearly stating that for the property market to get moving again there needs to be some bold steps.

It helps no one pleading a special case for people who invested in property, and chose to borrow from Amlak in particular, that they can no longer afford.

Wildwine Thursday, 31 January 2013 5:05 PM - UAE

@Richard P; so threatening the tenants (who have not broken any law) is considered the kind of bold step to get the market moving again? What else do you suggest, file legal action against all investors who have not paid 100% yet their properties are not even off the ground??
Based on my limited knowledge of law (of course interpretation of my home country), change of ownership does not mean that you can simply evict the tenant. You need to file a court case and get an eviction notice (which is highly unlikely in this case as tenant has not breached the contract).
Moreover, application of law in most countries can be totally different based on the circumstances.
I think it certainly warrants pleading a special case for the tenants in this case!

Practitioner Thursday, 31 January 2013 12:23 PM - UAE

@landlord,

OMG! Half of this article is wrong!. As a legal practitioner I see lots of cases where the tenants do not undertake a proper due diligence on the owner before signing the lease. The problem is that the current tenant did not lease the unit from the real owner. In conventional financing you are right, but most people forget/ignore the fact that in Islamic finance model the buyer is legally a "tenant" himself, so actually he is subletting the unit to the current tenant. If the financing Co. approved the sublease then they cannot evict the current tenant (so next time ask for the finance Co.?s approval on the lease IN WRITING), but in any other case the finance Co. has the right to evict the tenant, then the tenant should recover the paid rent from the lessor. Should have asked for the title deed as a proof of ownership because you would have seen that the apartment is owned by the bank/finance Co. and the lessor is mentioned there as a TENANT!!!

nice Thursday, 31 January 2013 11:40 AM - uae

As a matter of law Amlak has no right to do this. Their right is to petition the court for a sale of the property which would then be undertaken at public auction under the mortgage law provisions. They cannot force people out - they have no basis upon which to make such demands.

Richard P Thursday, 31 January 2013 9:05 AM - UAE

People seem to have forgotten that what we are talking about is repossession. I know that it is a dirty word, but everyone enters into a mortgage arrangement knowing that if they are unable to keep up with the monthly repayments, then their house/home is at risk.

And that is what has happened in these cases. The property has been foreclosed. The home owner no longer owns it. Amlak does.

Therefore, it is the home owner who has funds from the tenants that he/she is no longer entitled to.

And the owner should immediately repay that rent money to the tenant as they are no longer to honour that contract.

Why blame Amlak?

Horseman Thursday, 31 January 2013 12:22 PM - Dubai

@landlord you are absolutely right on the button here. This should never be allowed to happen. Surely part of the re-possesion law (if there is such a thing) should adequately take care of these situations. There surely is some adjustment to the amount that Amlak are owed with a sitting tenant's rent being offset - if Amlak choose to shift it on, then it surely has to be sold with the tenant in situ?!?!?! This will affect the sale value of the property and ultimately the amount the previous owner still owes to the finance company. In the end, the previous owner still pays and the current tenant is left to enjoy possession of the property upto the end of the tenancy contract.

The words 'threatening' do not paint Amlak, Emaar, Dubai in a good light whatsoever.

Come on guys, we can do better than simply evicting people who paid in good faith.

Telcoguy Thursday, 31 January 2013 11:38 AM - UAE

@Richard This has nothing to do with "dirty words". As a tenant your contract is valid does not matter who the owner is. As a rule when you buy (or foreclose) a property (or any asset) you are acquiring the liabilities, in this case the contract up to its end date. That would be the case if you sold the property normally, for a tenant it should make no difference

Essentially a 3rd party (the tenant) is not affected by the change in property of the asset for as long as they have a valid contract

Yes I know that given that this is a local firm I will not be surprised if this is not the case, but that is different from a moral or legal perspective as you are implying. That is precisely why i think (and I am not alone) this is bad news for the market, because we are going to see once again how little worth are contracts here

I am afraid your grasp of law and contracts is not very good. I am not sure if this is intentional or not

landlord Thursday, 31 January 2013 10:17 AM - uae

Richard you're obviously sitting behind the computer being self-righteous cause something like this probably never happened to you. Better hope it doesn't cause that would definitely changed your perspective.

The tenant should have no obligation to chase the owner for the money. That should be Amlak's issue to resolve.

Whatever happened between the owner and Amlak should not be the tenant's problem and Amlak needs to address the issue with owner.

The law clearly says that if the ownership of the property changes, the new owner gets possession of the property including the tenant if the tenant has a valid tenancy contract. Amlak can only ask the tenant to move out at the tenancy contract and only under certain conditions.

Jezinho Wednesday, 30 January 2013 5:39 PM - Bahrain

At the end of the day it boils down to what the law is in Dubai, not what is fair. In other countries I would expect the tenant to have rights of quiet enjoyment. What this does highlight is the folly of a market where tenants had to pay a year's rent in advance. If rentals were paid quarterly, then there would be no issue here.

neeta Wednesday, 30 January 2013 4:14 PM - uae

we have seen so many nasty cases of tenants not leaving when the brokers have cheated the land lords and the tenants arm twisting the landlords by not leaving . Be fair Rera , stand up for us . We invested in your country , worked hard put our money here and now your laws need to work in a clear manner .

Jake Thursday, 31 January 2013 11:40 AM - UAE

I have seen a couple of these cases. All of them had a fine document, signed by the owner of the unit, stating that contract or payment can be in the name of the agency. If you have authorized your agent with such a document the tenant has done nothing wrong and must be allowed to stay for the contract period.

Telcoguy Wednesday, 30 January 2013 3:55 PM - UAE

Hi Richard, I am not sure you are being sarcastic here. But in case you are serious, I will quote from the article:
Amlak seems to be asking people "to repay their rent or face eviction" the key word being "repay" the tenants already paid

And "notifying them [the tenants] that it [Amlak] will not honour existing tenancy contracts."

I am not sure how these measures, if true, will help Dubai's property market. But if this is true, it will be another example of the value of a contract in this part of the world, especially when you are facing a local firm. So yes, great news

Mark of Zoro Wednesday, 30 January 2013 3:17 PM - Argentina

As usual, the local companies here are misusing their local status by ignoring the law.

Richard P Wednesday, 30 January 2013 2:49 PM - UAE

This is an excellent decision by Amlak. Just surprised it has taken so long.

There needs to be bolder moves like this to help Dubai's property market.

gordon Wednesday, 30 January 2013 5:39 PM - dubai

@richard, when someone buys an apartment, they also take over any obligations for that apartment.

If you want bolder moves to help the property market, then stick to laws and international standards.