This is regarding a tenancy contract dated the 27th of January 2014 between a Nursery and the Landlord. The period of tenancy is two years i.e. from 1st February 2014 to 1st February 2016. Although the tenant remains the same, the ownership and management of the Nursery has changed. In the circumstances, we approached the Landlord to replace the post-dated cheques. He accepted the new post-dated cheques but is now not releasing the old post-dated cheques. Besides, he is claiming an immediate payment of AED 100,000 as well as wishes to have a further 10% increase at the time of expiry for renewal of the lease i.e. from 1st February 2016.
We believe that while he is entitled to increase the rent up to 10% at the expiry of the lease, it is difficult to justify any payment; simply because there is a change of ownership but with no change in the name of the tenant’s name – given that the tenancy contract is between the Nursery and the Landlord.
Could you please advise what are the rights and whether the Rent Committee will favour the Landlord and require us to pay AED 100,000 immediately and agree in writing to a future 10% increase in rent from 1st February 2016. Many thanks and look forward to hearing from you.
Thank you for your email.
Your situation is interesting as I’m not sure exactly where your landlord is coming from.
You say that the contract is between the Nursery (a company) and the landlord and that now there are new owners of the same company. You say the landlord wants an immediate payment of AED 100,000 but I say what for? I cannot see any justification for this. Furthermore, any increase in rent whether 10% or whatever can only be justified under 2 cases.
1.) If the increase is communicated 90 days before the Renewal of the contract and
2.) If the Rental Calculator states this is permissible.
It would appear that given the above, the landlord would be entitled to an increase in Rent at the next Renewal but stress this needs to be verified by the Rental Calculator at the time of renewal.
I agree with you that there is no justification for the extra money requested so I believe you do have a case at the Rental Committee. I do stress though that the actual outcome is not guaranteed as I am aware of some anomalies in the past. Unless your landlord can actually explain the reasons for the extra AED 100,000, I cannot see him gaining this advantage at the Rental Committee.
I hope this has helped.
The above answer has been brought to you by Mario Volpi who is the Managing Director of Ocean View Real Estate in Dubai. Mario has 30 years of property industry experience in Dubai and London.
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