Tenant remains the same, the ownership and management of the Nursery has changed, what are the rights?

Question:

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.

Answer:

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.

The advice provided in our columns does not constitute legal advice and is provided for information only. Readers are encouraged to seek appropriate independent legal advice.

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One thought on “Tenant remains the same, the ownership and management of the Nursery has changed, what are the rights?

  1. Hi, I have been staying in the same place for the last 4 year, My landlord is been increasing my rent every year. Last year he the increase was very high which i understood as it was to make it as per the market rate so form 55k he is increased to 65K cause i agreed to give him 2 cheques & in the contract he stated original value is 75K & charged 65K . This year when went for renewal he said cause i have signed the contract agreeing to increase my rent to 75K he can increase my rent. this is even after showing him the RERA calculation. Now he is trying to do the same thing contract value showing 85K & charged 75K . When asked to correct the contract he started shouting and saying that he will not provide any maintenance . Please advice if he can legally do that and is not this harassment ?
    Below is yearly increases that he has been doing :
    2010 – 45000
    2011 – 50000
    2012 – 52500
    2013 – 55125
    2014 – 65000
    2015 – 75000
    Looking forward to your support.
    Regards
    GT

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