Tenants of shops in residential buildings face “eviction for sale” or accepting a rent increase

Tenants of commercial shops in residential buildings complained of increasing pressure from property owners regarding the imposition of large increases in rental values ​​when renewing contracts, without adhering to legal controls or taking into account market conditions.

They told Emirates Today that if the tenant refuses the rent increase, he will be surprised with an eviction notice, under the pretext of selling the property or using it for personal purposes, which puts shop owners in a difficult position that threatens the stability of their businesses.

They pointed out that some landlords use the “eviction for the purpose of sale” clause as a means of pressuring them to accept unjustified rent increases, ignoring the increase rates allowed by regulatory authorities.

They confirmed that these practices negatively affect the continuity of their small and medium enterprises, and make them vulnerable to huge losses due to forced relocation or cessation of activity, in addition to shop equipment expenses, including decorations and others.

They called on the concerned authorities to plan to unify the terms of rental contracts for shops in residential buildings, in order to preserve the continuity of their projects, and to control the contractual relationship between the two parties.

On the other hand, real estate experts confirmed that developing plans to unify the terms of rental contracts for commercial shops in residential buildings is an unworkable proposal, because each owner has a special strategy in managing the properties belonging to him, stressing that the property owner does not have the right to remove the tenant from the commercial store except under conditions that must be met. They described these complaints as individual cases that do not represent a general trend in the market, pointing out that the laws are very clear in this aspect, and do not allow imposing any rent increases outside the specified framework.

Increasing pressures

In detail, tenants of commercial stores within residential buildings presented the challenges they face, related to increasing the rental values ​​of their stores, and the resulting demands to vacate the rented property if the rent increase is rejected.

A commercial tenant in Dubai, who preferred to remain anonymous, said: “We face increasing pressure from property owners when renewing lease contracts. We are often asked to accept large rent increases, without any clear justifications or consideration of current market conditions.”

He added: “If the tenant refuses these increases, he will receive an eviction notice, which puts him in a very difficult position and threatens the stability of his business,” pointing out that these pressures make store management and financial planning more complex, especially with monthly obligations and increasing operating costs.

It is noteworthy that the eviction notice must be at least 12 months in advance in accordance with Law No. (33) of 2008.

In turn, the tenant (M.S.) said: “We have noticed that some landlords use eviction under the pretext of selling the property or using it for personal purposes, as a means of pressuring tenants to accept unjustified increases. These practices completely ignore the legally permissible increase rates, and make us vulnerable to major risks such as forced relocation, or the cessation of commercial activity.”

He added: “For owners of small and medium enterprises, this matter not only affects the financial return, but can lead to serious losses as a result of the costs of preparing the store or the loss of customers.”

In the same context, the tenant (A.A.) said: “In most cases, landlords do not provide us with any real justification for the increase, nor do they give us sufficient opportunity to negotiate. The policy of (increase or eviction) has become the norm, and this contradicts the spirit of the law, which aims to achieve a fair balance between landlord and tenant.”

He added: “We need greater protection and long-term stability for our business, because any forced relocation or temporary cessation of commercial activity directly reflects on our income and investments in the store.”

Binding reference

In turn, the founder and CEO of Al-Rowad Real Estate Company, Ismail Al-Hammadi, said: “There is no dispute that real estate in Dubai is a free market, based on investment and return, but freedom does not mean chaos, and the rental relationship cannot be reduced to an equation (either increase or eviction).”

He added: “What we hear today from some commercial tenants about the use of eviction under the pretext of sale or personal use as a means of pressure to impose increases that exceed the approved rent index, is not just a passing complaint, but rather an indicator of danger if it is not read with the eye of legislation, not with the eye of emotion.”

He stressed that the law regulating the contractual relationship is clear, and the rental index in Dubai is not an optional proposal, but rather a binding reference designed to control the market and achieve a balance between the landlord and the tenant, stressing that any practice in which legal justifications for eviction are used, outside of its real context, is not a legitimate right, but rather a fraud that threatens confidence and commercial stability.

Al Hammadi continued: “Anyone who bets on coercing the tenant with threats ignores the most important fact: a good tenant is the highest quality commercial asset in the building, and his loss means vacancy, stopping income, and rotating units at a higher cost and lower results. In the end, real estate is not profitable with its walls, but rather with the businesses that live within it.”

He stressed that “Dubai did not become a global economic capital with a culture of (imposition), but rather with a model governed by law, regulated by logic, and preserved by trust between the parties,” noting that the Rental Dispute Resolution Center in Dubai has proven to be the fairest resort for resolving any imbalance, without courtesy or derogation from rights.

Al-Hammadi said: “The deeper message today is not only legal, but economic, which is that the sustainability of the market is more important than an immediate increase, and a fair relationship is stronger than a contract imposed by coercion.”

Illegal practices

In turn, the CEO of Standard Real Estate Management Company, Abdul Karim Al Mulla, said that some tenants who fall victim to illegal practices by some landlords are often ignorant of their legal rights and the regulations in force in the Emirate of Dubai, stressing that the laws are very clear in this aspect, and do not allow the imposition of any rent increases outside the specified framework.

He explained that the landlord cannot raise the rent except after referring to the rental index approved by the Dubai Land Department, where the increase, if any, is determined based on the legal percentages only, and if the index does not find any increase, the landlord has no right to claim it.

He pointed out that the rental law in Dubai clearly stipulates the cases in which the landlord may request eviction, such as the actual demolition of the property, or the desire of the owner or one of his first-degree relatives to use the property for the purpose of housing, provided that this is proven. As for eviction under the pretext of sale or personal use without actual implementation, it is considered a clear violation.

He pointed out that if it is proven that the landlord did not implement the reason for the eviction after evicting the tenant, such as not demolishing the property or not selling it, then the tenant has the right to file a complaint before the Rent Committee and demand compensation or to return him to the same property.

He stressed that the regulatory authorities in Dubai, led by the Real Estate Regulatory Agency (RERA), deal seriously with such cases, and the penalties may extend to preventing the owner from renting the property again for a specific period if the violation is proven.

He stressed that the laws in Dubai are fair and clear for both parties, pointing out the importance of both the landlord and tenant being fully aware of their rights and duties, and that referring to official laws is the best way to ensure justice and transparency in the rental relationship.

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The smart rent index established the principle of fairness

The director of real estate at Al-Waleed Real Estate Group, Muhammad Turki, confirmed that “it is not possible to implement plans to unify the terms of rental contracts for commercial shops in residential buildings, as each owner has a special strategy for managing his properties.”

He added: “The law is clear in regulating the contractual relationship between the landlord and the tenant, and is fair to both parties,” pointing out that complaints related to receiving eviction notices, as a means of pressuring tenants to accept rent increases, are individual cases that do not represent a general trend in the market.

Turki called on tenants, if they are exposed to such situations, to resort to the competent legal channels and open a file at the Rental Disputes Resolution Center, and not to submit to any individual actions of some landlords, stressing that “the legal system in Dubai is a model to be followed in achieving justice between all parties.”

He noted that the smart rent index, which was launched by the Land Department at the beginning of this year, established the principle of justice and transparency between landlords and tenants, as it accurately determines the annual increase rates in various regions of the emirate, and no landlord may exceed the rates specified in the index.

• The Rental Dispute Resolution Center is the fairest resort for resolving any defect.

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4 cases of eviction upon expiration of the contract

• Demolition or addition to the building with obtaining permits.

• Repair or maintenance that cannot be carried out in the presence of the tenant.

• The owner’s desire to use the property for himself or his relatives (first degree).

• The owner’s intention to sell the property.

In accordance with Law No. 33 of 2008 regulating the relationship between landlords and tenants of real estate in the Emirate of Dubai

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9 cases in which the landlord has the right to request eviction

• Failure to pay rent within 30 days of notification.

• Subletting without permission.

• Using the property for illegal purposes.

• Leaving the commercial property for a long period without reason.

• Cause damage to the property or make a fundamental change in it.

• Using the property in violation of building regulations.

• A report is issued that the property is on the verge of collapse.

• Violating the terms of the contract or the law despite notification.

• Demolishing the property for development according to government agencies’ plans.

In accordance with Law No. 33 of 2008 regulating the relationship between landlords and tenants of real estate in the Emirate of Dubai