Dubai sale with a tenant in place: lease, 12-month notice, Ejari

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Kooky

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An owner in Dubai who decides to sell a flat or a villa that is let has two things to sell at once: a property, and a lease that somebody else is living under. The buyer may want both, as an investor who keeps the tenant. Or the buyer may want the keys, to move in. The price, the timetable and the paperwork differ between the two, and the difference is set by a handful of articles in the emirate's tenancy law.

That law is Law No. (26) of 2007 Regulating the Relationship between Landlords and Tenants in the Emirate of Dubai, issued on 26 November 2007, as amended by Law No. (33) of 2008, issued on 1 December 2008. Both are published on the Dubai Legislation Portal. The amending law replaced eleven articles of the first, including the one on eviction, so the two have to be read together.

This guide follows a sale of a let home from the seller's side. It covers what the law says happens to the lease, the notice needed to sell with vacant possession, what the texts say and do not say about viewings, what the Dubai Land Department asks for when the sale is registered, what its pages say about the Ejari record and the security deposit afterwards, and the route through the Rental Disputes Center when a tenant stays. How rent rises are capped and how a lease is first registered are the subject of a separate guide and are not repeated here.

Law No. (26) of 2007 as amended by Law No. (33) of 2008, Dubai Legislation Portal; Dubai Land Department, Property Sale Registration service page.

The starting point: a sale does not end the lease

The rule that shapes everything else is Article 28 of the 2007 law, one of the articles the 2008 amendment left untouched. It says that the transfer of ownership of a property to a new owner does not affect the tenant's right to go on occupying it under a fixed-term lease made with the previous owner.

Two other provisions close the circle. Article 7 says that a valid lease may not be ended by the landlord or the tenant alone during its term; it ends by mutual consent or as the law provides. And the definition of "Landlord" in Article 2, as replaced by Law No. (33) of 2008, covers a person to whom ownership is transferred during the term of the lease. The buyer, in other words, does not stand outside the lease. The law treats the buyer as the landlord from the transfer.

The Rental Disputes Center, the body that hears landlord and tenant cases in Dubai, puts the same rule in three plain statements on its question-and-answer page: a rented apartment can be sold and there is no legal impediment to doing so; the tenant's rights remain unchanged when ownership changes; and a new owner who wants the tenant to vacate must send a legal notice in accordance with the law.

For the seller, the practical meaning is that a sale can go ahead at any point in a tenancy. Nothing in the texts read for this guide requires the tenant's consent to the sale, and nothing requires the property to be empty. What the seller cannot do is deliver an empty property simply because a buyer has been found.

Two sales, two timetables

A let home can therefore be sold in two ways, and the law treats them very differently.

The first route is quick on the tenancy side, because nothing about the lease changes except the name of the landlord. Its limit is the buyer: the Dubai Land Department's frequently asked questions say that, where tenants are retained, the new owner becomes the landlord and takes on the previous landlord's obligations, including any special terms that were agreed. A buyer who takes the property on these terms also takes the rent, the term and the contract as they stand.

The second route gives the buyer an empty home, but only after a notice period of at least twelve months. The two can also be combined, since the law does not tie the notice to the sale date: a notice can be served and the property sold before the notice has run, in which case the tenant stays under Article 28 in the meantime. What the texts say about who then relies on the notice is taken up below.

The twelve-month notice when the owner wishes to sell

Eviction at the end of a lease is governed by Article 25(2), as replaced by Law No. (33) of 2008. It lists four cases in which a landlord may seek to recover the property when the lease expires. The fourth, at point (d), is that the owner wishes to sell the property.

The same paragraph sets the condition. The landlord must notify the tenant of the reasons for eviction at least twelve months before the date set for eviction, and the notice must be given through the Notary Public or by registered mail.

Three features of the wording deserve attention.

First, the period is counted back from the eviction date, not forward from the end of the lease. The article links two things: the eviction is sought when the lease expires, and the notice must be at least twelve months old by the eviction date. As a worked example, take a notice served on 10 October 2026. Twelve months later is 10 October 2027, so no eviction date earlier than that satisfies the period. If the lease in that example runs to 31 March 2027, it expires before the twelve months have passed. The articles read for this guide do not spell out how the two dates are then aligned. Article 6 says that a tenant who stays after expiry without objection from the landlord holds a lease renewed for the same term or one year, whichever is shorter, on the same terms. How a particular notice and a particular expiry date fit together depends on the case and is a matter for the Rental Disputes Center.

Second, the ground belongs to the owner. The article speaks of the owner wishing to sell. The Land Department's frequently asked questions state the same period for a sale, at least twelve months through the Notary Public or registered mail, and add, as read for this guide, that the landlord must be able to show that the sale is genuine. That requirement is not in the words of Article 25(2)(d). The department's answer also mentions the absence of a suitable alternative property, a condition which the law itself attaches to point (c), recovery for personal use, and not to a sale.

Third, the twelve months come from the 2008 amendment. The page of the 2007 law on the Dubai Legislation Portal still shows the original wording, with no note of amendment.

What the notice does not change

A notice of eviction for sale starts a clock. It does not alter the lease while the clock runs.

The rent stays due. Under Article 19 the tenant pays the rent on time, and Article 31 adds that even the filing of an eviction claim does not release the tenant from paying rent until the claim is decided and the award carried out.

The term stays protected. Article 7 still applies, so neither side can end the lease early on its own. The Land Department's frequently asked questions note that the law fixes no notice period for early termination: leaving early is a matter of agreement between the two parties, and otherwise the term is honoured.

A renewal in the meantime follows the ordinary rules. Under Article 14, as replaced in 2008, a party that wants to change the terms at renewal must notify the other at least 90 days before the lease expires, unless they have agreed otherwise. That 90-day notice and the twelve-month notice are two different instruments. One changes the rent or the conditions of a lease that continues. The other announces that the landlord will seek to recover the property.

One protection is, as this guide reads the amended text, limited to another ground. Article 26, as replaced in 2008, bars a landlord who recovers a home for personal use from letting it to someone else for two years, or three years for non-residential property, and lets the tenant ask for fair compensation if that happens. On this guide's reading of the 2008 wording, which is a reading and not a ruling, the article refers to recovery under point (c) of Article 25(2) and does not mention point (d); the law read for this guide sets out no equivalent rule for an owner who recovers a property in order to sell and then does not sell.

Viewings: what the law and the standard contract say

Selling a home usually means showing it, and a let home is somebody else's residence. On this point the official texts are almost silent, and the silence is itself the finding.

Neither Law No. (26) of 2007 nor the articles replaced by Law No. (33) of 2008 contain a provision on access by the landlord, an agent or a prospective buyer for viewings or inspections. The Tenancy Guide published by the Real Estate Regulatory Agency, which reproduces the tenancy legislation, does not address the question either.

The Land Department's unified tenancy contract, the standard form used for Ejari registration, has fourteen printed terms. None grants the landlord a right of access or inspection, and none deals with a sale. Term 8 runs the other way: the landlord undertakes to ensure the tenant's full use of the premises and to do nothing that reduces the benefit of them.

What follows from this is narrow but clear. Where a lease has an added clause on viewings, that clause is the place to look, within the limit that term 12 sets. Where it has none, the texts read for this guide give the seller no rule to rely on, and arrangements for viewings are a matter of agreement with the tenant. Whether a given pattern of visits amounts to a disturbance under Article 34 is a question the law leaves to the Tribunal.

Registering the sale at the Land Department

The sale itself is registered through the Dubai Land Department's Property Sale Registration service, which covers the full or partial sale of land, a property or a completed unit between a seller and a buyer or their legal representatives. Its channel is the Real Estate Registration Trustee centres, and the page gives a processing time of 25 minutes.

For a seller with a tenant, the notable thing about the service page is what it does not ask for. The documents it lists for individuals are two:

• the Emirates ID of the seller and of the buyer, or a valid passport for a non-resident foreigner;
• a no-objection e-certificate from the developer, in freehold areas, obtained through the Dubai REST app.

The page lists no tenancy contract, no Ejari certificate, no statement about occupancy and no proof of vacant possession. A company must be registered with the department before it can be a party. The page read does not say whether the developer's certificate or any other step depends on the tenancy; the developer's own conditions were not read for this guide.

The procedure on the page runs in five stages.

The fees are the same whether the home is let or empty. The page gives 2% of the sale value for the seller and 2% for the buyer, AED 250 for the issue of the title deed, a map fee, a knowledge fee and an innovation fee of AED 10 each, and a service partner fee of AED 4,000 plus VAT where the sale value is AED 500,000 or more, or AED 2,000 plus VAT below that. As a worked example, on a let apartment sold for AED 1,500,000 each of the two 2% shares comes to AED 30,000, and the partner fee is the AED 4,000 band.

Because the registration does not look at the lease, the contract of sale is where a seller and a buyer record whether the property is sold let or vacant, and on what date. The texts read for this guide prescribe no wording for that.

The Ejari record after the sale

Ejari is the Land Department's register of tenancy contracts. Article 4 of the tenancy law, as replaced in 2008, requires every lease, and every amendment to a lease, to be registered with the Real Estate Regulatory Agency, and requires the lease to name the owner where the landlord is not the owner. A sale changes the owner. What happens to the registration is the least documented part of the subject.

No official page read for this guide describes a service for transferring a registered tenancy contract to a new owner. The Register / Renew Tenancy Contract page does not mention a change of owner or a sale. The Cancel Tenancy Contract page does not either. What the pages do provide are the conditions and services from which the position can be read:

• The landlord on the record must be the owner. The registration page states, among its conditions, that the landlord must be the owner of the property or a legal representative, and that for registration through the app the owner's data must be up to date. The Tenancy Guide adds that the title deed must be in the owner's name and the property registered at the Land Department. Term 9 of the unified contract has the landlord confirm being the current owner or a representative under a valid power of attorney.
• Registering a contract has a set price. The registration page gives AED 177.75 through the app or the website and AED 220 at a trustee centre, with a processing time of 25 minutes at a centre. The output is an e-Contract Registration Certificate.
• Cancelling a contract that is still running needs the owner. The cancellation service is designed for an expired contract on a vacated property. It is free through the Dubai REST app or the Ejari system and costs a service partner fee of AED 40 plus VAT at a trustee centre. For a contract still in force, the page asks for the original contract and a letter from the owner requesting the cancellation.
• A management contract does not move. The department's frequently asked questions say property management contracts cannot be transferred; they are cancelled and created again.

On the substance, the department's frequently asked questions are direct: with retained tenants, the new owner becomes the landlord, must give the tenants updated contact details and a statement of the security deposit, and may raise the rent but not the deposit. Any rise remains subject to the cap and the 90-day notice described in the guide to rent increases.

The mechanics, whether the existing registration is amended or cancelled and a new one issued in the buyer's name, are an open point on the pages read.

The security deposit when the owner changes

Article 20 of the 2007 law allows the landlord to take a security deposit to secure the maintenance of the property at the end of the lease, and requires the landlord to undertake to refund it, or what remains of it, when the lease expires. Article 21 sets the standard for the handover: the tenant returns the property in the condition in which it was received, apart from ordinary wear and tear and damage beyond the tenant's control, and a disagreement about that goes to the Tribunal.

The law sets no amount. The unified tenancy contract has a field for the security deposit amount but no printed term about its conditions, its refund or deductions from it.

The law does not say how the deposit passes from a seller to a buyer. What the texts do establish is who answers to the tenant. Under the Article 2 definition the buyer is the landlord once ownership is transferred, Article 20 puts the refund on the landlord, and the Land Department's frequently asked questions say the new owner takes on the previous landlord's obligations and must give the tenant a statement of the deposit, without being able to increase it. A tenant who leaves a year after the sale will, on those texts, look to the owner of that day. How the seller and the buyer settle the sum between themselves is left to their own agreement.

The department's answers also describe what the deposit is for. It covers the repair of damage; a tenant pays for damage beyond its value; minor wear from normal daily use is not the tenant's responsibility; and the condition of the property should be documented at handover with both parties present. The Rental Disputes Center's question-and-answer page says a tenant can reclaim the deposit where the property is returned in the condition in which it was received, and that a refund can be pursued through a payment writ.

If the tenant does not leave: the Rental Disputes Center

A notice, however correctly served, is not an order. Article 25 describes the cases in which a landlord may seek eviction, and term 10 of the unified contract sends disputes arising from the lease to the Rental Disputes Center. Under Article 35 of the 2007 law, awards to vacate are carried out through the Tribunal under its own rules.

The Center's question-and-answer page lists a sale by the owner among the grounds that are filed as an eviction request within a new lawsuit. The documents it asks for include the latest lease with its Ejari registration, the Emirates ID or trade licence, the owner's passport and residence permit where the owner is an expatriate, a valid management contract where there is one, a bank letter or statement showing the IBAN, and a copy of the notice with the notary's statement or the proof of registered mail. The last item is where a notice sent by another route shows its weakness.

The cost is set as a share of the rent. The page gives a registration fee of 3.5% of the annual rent for an eviction claim, with a minimum of AED 500 and a maximum of AED 20,000. If the judgment is for eviction and has to be enforced, the fee for executing it is 1% of the annual value of the lease, with a maximum of AED 5,000. The table works both through for two rents chosen as examples.

On timing, the page says the first session is set at least seven days after the fee is paid, and that a claim left unpaid is cancelled automatically after five days. A judgment can be executed from 15 days after it is given in the presence of the parties, or 15 days after notification where it was given in absence. The same 15 days are the period for an appeal, and an eviction judgment can be appealed whatever the amount involved. A tenant ordered to leave can also ask electronically for an extension of the eviction deadline, which the Eviction Section of the Center's Execution Department reviews.

For a seller, the consequence is a matter of sequence. The twelve months of notice come first, then, if the tenant stays, a claim, a judgment, the appeal period and execution. A sale agreed with vacant possession on a fixed date therefore depends on events the seller does not control. The procedure, the appeal thresholds and enforcement are set out in full in the guide to the Rental Disputes Center.

What the official texts leave open

Several points a seller is likely to ask about are not settled by the pages read for this guide, and are named here so that they are not mistaken for rules.

• The Ejari transfer. The pages give the conditions for registering and cancelling a contract, not a change-of-owner service.
• Viewings. The law, the Tenancy Guide and the unified contract contain no right of access for a sale.
• The deposit between seller and buyer. The law puts the refund on the landlord and does not regulate the handover of the money.
• The notice and the expiry date. Article 25(2) does not say how a lease that ends earlier or later than the twelve months is treated.
• Who relies on a notice after the sale. The pages read do not say whether a notice served by the seller before the transfer can be relied on by the buyer.
• An owner who does not sell. On this guide's reading, no rule parallel to Article 26 appears for a sale in the text read.

The Land Department's frequently asked questions were read in part, and the developer's conditions for a no-objection certificate were not read at all. On each of these points the answer for a given property depends on its lease, its dates and the documents the parties hold.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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