What happens if my rented property gets a new owner?

Updated : April 15, 2017

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It is mandatory in Dubai to register the tenancy contract with the Dubai Real Estate Regulatory Agency

I am a tenant in Dubai with a tenancy contract which expires at the start of May 2017. My tenancy contract has not been registered with Ejari (I had attempted to do so back in May 2016 but had problems with the typing centre and it was not completed). The property I am renting is in the process of being repossessed by my landlord’s bank as he has defaulted on his home loan/mortgage. Court bailiffs arrived at the property last week and I presented my existing tenancy contract to them.

The landlord’s bank has told me they are intending to repossess the property imminently and that a court order is likely to be granted within 15 days, at which point the landlord will be struck off the title deed. I wish to remain on the property whether the repossession happens or not.

If the court order is granted prior to the expiry of my existing tenancy contract, does the bank (and/or any new owner) still have a legal obligation to give me 12 months’ notice (considering the current tenancy contract has not been Ejari registered)? If I renew the tenancy contract with the landlord prior to the court order (and pay in one cheque as he is demanding), would the new tenancy contract still stand once the property is repossessed by the bank?

Pursuant to your queries, it is mandatory in the emirate of Dubai to register the tenancy contract with the Dubai Real Estate Regulatory Agency (Rera) to particularly safeguard the interests of the tenant. This is in accordance with Article 4 (2) of Law No. 33 of 2008 amending law no 26 of 2007 regulating the relationship between landlords and tenants in Dubai, which states: “All tenancy contracts or any amendments to such tenancy contracts related to real property which are subject to the provisions of this law will be registered with Rera.” If your tenancy is registered by means of ‘Ejari’ with the Rera, it will therefore be recognised by the court and all the government agencies and departments linked in to the system so that in case of any legal hurdle it will be more helpful in protecting your interest.

You may reside in the property until the expiry of your tenancy contract in accordance with Article 28 of Law No. 26 of 2007 regulating the relationship between landlords and tenants in Dubai, which states, “Transferring the ownership of real property to a new owner does not affect the tenant’s right to continue to occupy the real property by virtue of the lease contract entered into with the previous owner, provided that such lease contract has a fixed term.”

End of service benefits for government employees

A friend of mine is working for a government entity in Abu Dhabi. He initially signed a two-year contract, which was extended by a year twice. He is now coming to the end of his fourth year at the entity. His contract did not stipulate an end of service payment, and he did not know about it when he first signed it. His employer has recently stated that they are now going to pay an end of service payment to all expatriate employees at the rate of only 30 per cent of 21 days per year, which will come upto 6.3 days per year. So, in his case, he will be entitled to a total of 25.2 days – instead of 84 days payment. When he questioned the employer about this, they said that the government entity does not come under the UAE Labour Law, and therefore, they could legally do this. Is this correct? What law should they be adhering to?

Pursuant to your queries, we assume that your friend is employed by an independent Federal Entity in Abu Dhabi. Your friend’s employment is regulated by ‘Council of Ministers Resolution No. 15 of 2013 on the Human Resources Regulation for the Independent Federal Entities’ (the “Government Employment Law”). There is no requirement of clause related to end of service benefits to be mentioned in the Employment Contract. Even though specific clauses related to employment are not mentioned in the Employment Contract all the provisions of Government Employment Law will apply. Article 145 (2) of the Government Employment Law states: “The noncitizen employee shall deserve end of service reward upon the termination of the service as follows:

(a) Basic salary for one month per each year of the first five years of the service;

(b) Basic salary for one month and half for each year of the following five years of the service;

(c) Basic salary for two months for each year of the service years that exceed such period;

(d) The employee may not deserve end of service reward, if his service period at the Federal Entity was less than one successive year;

(e) For purposes of calculating the end of service reward, the notice period and accumulative leave shall be calculated as part of the service period and the part of the months shall be considered a complete month; and

(f) The end of service reward shall be paid to the employee who acquired the nationality of the state based upon the last basic salary received by him before acquiring the nationality.”

The employment does not fall under the ambit of employment laws for private sectors in the UAE. The Federal Law No. 8 of 1980 regulating Employment Relations in the UAE (the “Employment Law”) applies only to private sectors. This is in accordance with Article 3 of the Employment Law which states, “The provision of this Law shall not apply to the following categories:

(a) Officials, employees and workers of the Federal Government, governmental departments of the member Emirates of the State, officials, employees and workers of the municipalities and other officials, employees and workers employed by public corporations and Federal and local public institutions, and also the officials, employees and workers who are appointed against Federal and local Governmental Projects.

(b) Members of the armed forces, police and security;

(c) Domestic servants employed in private residences and the like;

(d) Workers employed in agricultural or grazing of animals, other than persons working in agricultural establishments which process their own products and those who are permanently employed to operate or repair mechanical equipment required for agricultural work.”

Source: Khaleej Times