Real Estate

The Dubai Court of First Instance has ruled in favour of a property seller in a real estate dispute involving a transaction valued at Dh27 million, ordering a real estate brokerage company to pay Dh2,513,000 representing the deposit held by it.

The dispute arose after the purchaser failed to complete the property transaction and meet the contractual payment obligations within the agreed deadline. Although a binding sale agreement had been executed and a security deposit of Dh2.5 million paid, the purchaser did not settle the outstanding purchase price or proceed with the transfer of ownership.

The seller initiated legal proceedings seeking to establish the purchaser’s breach of contract, confirm the termination of the sale agreement and secure the right to retain the deposit under the terms governing default.

The proceedings focused on the contractual obligations of the parties and the consequences of the purchaser’s failure to complete the transaction within the stipulated period.

The seller’s legal team presented the agreement and supporting evidence to demonstrate that the purchaser had failed to fulfil the contractual requirements. The case centred on whether the breach entitled the seller to retain the deposit in accordance with the provisions agreed by the parties.

After examining the contractual terms and evidence, the Dubai Court of First Instance ruled in favour of the seller, confirming the termination of the sale agreement.

The court ordered the relevant real estate brokerage company to pay Dh2,513,000 to the seller, representing the deposit held by the brokerage. It also ordered the purchaser to bear the court fees and expenses, together with an amount towards legal costs.

The litigation was led by UAE-based legal consultancy Kaden Boriss, which represented the seller in seeking enforcement of the contractual provisions and recovery of the deposit following the failed transaction.

The judgment highlights the importance of clearly defined contractual obligations and default provisions in high-value property transactions. It also illustrates the legal remedies that may be available to sellers when purchasers fail to complete a transaction in accordance with the agreed terms.

For parties entering into substantial real estate deals, the dispute underscores the importance of understanding the legal consequences of failing to meet payment deadlines and the contractual conditions governing deposits, termination and financial liability.

A commercial lease represents a substantial financial commitment, often tying a business to premises for several years. In the UAE, businesses should not assume that the law will fill every gap in an agreement or protect them against the consequences of poorly drafted terms. While legislation establishes certain rights and obligations, the lease itself remains central to determining how risks are allocated between landlord and tenant. This article examines mainland commercial leases in Dubai and the contractual issues most likely to lead to disputes.

The Legal Framework

Commercial leases in Dubai are principally governed by Law No. 26 of 2007, as amended by Law No. 33 of 2008. The legislation covers premises leased for commercial, trade or professional activities under Article 2. Article 4 requires a lease to identify the property and its intended use, specify the term and rent, and set out the method of payment. Registration through the Real Estate Regulatory Agency’s Ejari system is also required. Disputes fall within the jurisdiction of the Rental Disputes Centre, established under Decree No. 26 of 2013. Businesses should note that other emirates have their own rental legislation, while financial free zones such as the Dubai International Financial Centre may operate under separate legal regimes.

Permitted Use and the Landlord’s Title

A lease should identify the activity for which the premises may be used. A tenant that departs from the agreed purpose or breaches applicable planning and land-use requirements may face eviction under Articles 4 and 25(1)(f). Before committing to a property, a business should establish that its licensed activity is permitted at that particular location and that the premises can lawfully accommodate its intended operations. It should also verify the landlord’s ownership or authority to grant the lease. Where the landlord is not the property owner, Article 4 requires the owner to be identified in the agreement. These checks are particularly important where a business intends to undertake specialised operations or invest substantial sums in adapting the premises.

Fit-Out Works and Reinstatement Obligations

The condition in which premises are handed over can have significant financial implications. Under Article 15, the landlord must deliver the property in a condition that enables the tenant to use it for the agreed purpose. The parties may also agree to a lease before construction is complete, with the tenant undertaking the remaining work and the agreement determining who bears the cost. Article 19 restricts alterations without the landlord’s permission and the necessary licences, subject to agreed or customary restoration work. At the end of the tenancy, Article 21 generally requires the tenant to return the premises in the condition in which they were received, allowing for ordinary wear and tear. Article 23 further provides that, unless otherwise agreed, the tenant may not remove leasehold improvements.

The agreement should consequently spell out who owns the fit-out, whether installations must be removed at the end of the lease and who will pay for reinstatement. It should also distinguish between structural repairs, routine maintenance and damage caused by the tenant. Under Article 16, the landlord is generally responsible for maintenance and defects that prevent the property from being used for its intended purpose, unless the parties agree otherwise. A vague allocation of responsibility can leave both sides disputing substantial costs when the tenancy ends.

Renewal and Security of Tenure

Businesses should not treat renewal as automatic or assume that continued occupation guarantees a fresh long-term lease. Under Article 6, where the lease expires and the tenant remains in occupation without objection from the landlord, the tenancy is renewed on the same terms for a period equal to the shorter of the original lease term and one year. This may offer continuity, but it does not necessarily provide the longer commitment a business needs for expansion or investment.

A landlord seeking eviction at the end of the term must rely on one of the grounds specified in Article 25(2). These include demolition and reconstruction, restoration work that cannot reasonably be carried out while the tenant remains in occupation, use by the owner or a first-degree relative, and a proposed sale of the property. The applicable conditions vary according to the ground relied upon and may require permits, a Dubai Municipality technical report or evidence that the owner has no suitable alternative property. The landlord must give at least 12 months’ notice, state the reason for eviction and serve the notice through a Notary Public or by registered mail. Article 26 also restricts the reletting of non-residential premises recovered for the owner’s own use: the property may not be leased to a third party for three years. Tenants planning costly fit-outs should factor these restrictions and notice requirements into their investment decisions.

Rent, Service Charges and VAT

Rent negotiations should begin well before the lease expires. Unless the agreement provides otherwise, Article 14 requires a party seeking to amend the terms on renewal to notify the other at least 90 days before expiry. If the parties cannot reach agreement, the Rental Disputes Centre may determine a fair rent by considering the Real Estate Regulatory Agency’s rental guidelines and comparable rents, in accordance with Articles 9 and 13.

The rent figure alone may not reflect the full cost of occupation. A business should establish whether service charges, district cooling and other recurring expenses are included or payable separately. The lease should also clarify whether rent is inclusive or exclusive of value-added tax (VAT). Commercial rent is generally subject to VAT at five per cent under Federal Decree-Law No. 8 of 2017, where the relevant tax requirements are met. Clear drafting on these expenses helps businesses prepare realistic budgets and reduces the scope for disputes over additional payments.

Default and Eviction

Article 25(1) sets out the grounds on which a landlord may seek eviction during the lease term. Failure to pay rent within 30 days of a notice demanding payment can trigger eviction proceedings, unless the agreement provides otherwise. A tenant may also face eviction if it fails to remedy a breach within 30 days of being notified. Another ground concerns leaving commercial premises unoccupied without a valid reason for 30 consecutive days or 90 days in total during a year, again subject to the terms of the lease.

These provisions make it important to establish clear procedures for payment, service of notices and the correction of breaches. Tenants should ensure that payment records are maintained and that any alleged breach is addressed within the applicable period. Landlords, meanwhile, cannot resort to self-help measures to recover possession. Article 34 prohibits a landlord from disconnecting services or otherwise disturbing the tenant’s use of the property. Disputes over arrears or breaches must be handled through the legally prescribed process rather than by disrupting business operations.

Early Termination

A tenant that needs to leave before the agreed expiry date cannot ordinarily assume that it may terminate the lease unilaterally. Article 7 provides that a valid lease may be ended during its term by mutual agreement or in circumstances permitted by law. Businesses anticipating a possible relocation, restructuring or change in operational requirements should therefore negotiate a break clause before signing.

Such a clause should identify who may exercise the right to terminate, the notice period required and any payment due on exit. It may also make termination conditional on the absence of outstanding rent or an unremedied breach. Where the agreement stipulates compensation for early termination, Article 340 of the new Civil Transactions Law, Federal Decree-Law No. 25 of 2025, permits a court to reduce agreed compensation where the debtor establishes that it is excessive. This does not remove the need for a carefully negotiated exit mechanism, particularly where the landlord has incurred costs or suffered loss in reliance on the agreed term.

Assignment, Subletting and Changes in Ownership

A business may wish to transfer its lease as part of a sale, restructure its operations or allow another business to occupy part of the premises. Article 24 provides that, unless the lease states otherwise, the tenant cannot assign or sublet the property without the landlord’s written consent. Unauthorised subletting is a ground for eviction under Article 25(1)(b), and the consequences may extend to the subtenant. Under Article 8, a sublease ordinarily ends when the head lease expires or is terminated, unless the landlord expressly agrees otherwise.

The agreement should specify whether consent may be withheld, whether it must be given within a defined period and whether a transfer to an affiliated company or purchaser is permitted. These provisions can become particularly important when a business is sold or reorganised. A change in the property's ownership, however, does not by itself extinguish a tenant’s rights under a fixed-term lease. Article 28 preserves those rights when the building is sold, giving tenants a degree of protection against disruption arising solely from a transfer of ownership.

Force Majeure and Hardship

The new Civil Transactions Law, Federal Decree-Law No. 25 of 2025, took effect on 1 June 2026, repealing Federal Law No. 5 of 1985. Its application to a particular lease depends, among other things, on the date the contract was concluded and the relevant transitional provisions. Two provisions are especially significant when unexpected events make contractual performance difficult or impossible.

Under Article 224, exceptional circumstances that could not reasonably have been foreseen and that make performance excessively onerous may allow a court to reduce the obligation to a reasonable level or cancel the contract. An agreement cannot validly exclude that statutory power. Article 236 addresses a different situation: where force majeure makes performance of a bilateral contract impossible, the corresponding obligations are extinguished and the contract is automatically cancelled.

Businesses should not assume that financial pressure, reduced demand or an interruption to operations will automatically qualify as force majeure or hardship. The facts and the applicable legal requirements remain decisive. A lease should define force majeure carefully, address the consequences of interruption and allocate responsibilities where possible. Any clause purporting to exclude the court’s power under Article 224 must also be considered in light of the statutory restriction.

Conclusion

A commercial lease determines much more than the rent a business pays. It can shape the cost of fitting out premises, the ability to remain after expiry, liability for repairs, the consequences of default and the options available if circumstances change. Before signing, a business should be able to establish who owns the improvements, which additional charges it must pay, what conditions govern renewal and termination, and whether assignment or subletting is permitted. Where these questions are left unanswered, the parties may find themselves relying on statutory default rules or seeking a determination from the Rental Disputes Centre. Careful review at the outset can reduce uncertainty and help protect a business from avoidable disputes over the life of the tenancy.

Ending a construction contract before completion can have significant financial and legal consequences, particularly when a contractor has already committed substantial time, resources and money to a project. The UAE’s new Civil Transactions Law expressly addresses an employer’s right to terminate a contract before the work is finished, setting out a framework for compensation that may extend beyond the value of work completed.

Federal Decree-Law No. 25 of 2025 promulgating the UAE Civil Transactions Law came into force on 1 June 2026, replacing Federal Law No. 5 of 1985. The new law regulates construction and works contracts, commonly known as muqawala contracts, under Articles 812 to 839. Among its notable provisions is Article 836, which specifically addresses an employer’s right to withdraw from a contract before completion and the resulting obligation to compensate the contractor.

The Statutory Right to Terminate for Convenience

Article 836(1) provides that an employer may withdraw from a muqawala contract at any time before completion, provided the contractor is compensated for expenses incurred, the value of work already performed and the profit that would have been earned had the contract been completed. The provision establishes a statutory basis for early termination even where the contractor has committed no breach of its contractual obligations.

The right may be relevant when an employer decides to abandon a project, revises its commercial priorities, encounters financial difficulties or changes the scope of the proposed development. Such decisions do not necessarily indicate any failure by the contractor, yet they may leave the employer liable for substantial sums. The financial consequences of withdrawal must therefore be considered alongside the commercial reasons for bringing the contract to an end.

Employers should not interpret termination for convenience as an unrestricted right to walk away without compensating the contractor. Although the employer may no longer wish to proceed with the project, Article 836 recognises the contractor’s financial exposure and provides for compensation intended to address the consequences of early termination. The precise amount, however, will depend on the circumstances and the evidence available to support the claim.

Assessing Compensation After Termination

Article 836 identifies three principal components of compensation: expenses incurred, the value of work completed and the profit that would have been earned on completion. Each element requires careful assessment against the contract, project accounts and supporting documents. A reliable valuation should distinguish between expenditure already incurred, work for which payment remains outstanding and the financial return that the contractor could reasonably have expected from the uncompleted portion of the project.

Recoverable expenses may include mobilisation costs, labour, procurement, subcontracting and materials acquired for the works. The parties should establish the value of work performed by reference to the contractual payment mechanism, interim certificates and amounts already paid. Materials ordered or purchased before termination may require separate consideration, particularly where orders cannot be cancelled, goods cannot be returned or the materials have little practical value outside the project. Outstanding commitments to suppliers and subcontractors may also affect the overall assessment.

The anticipated profit element can be more difficult to quantify. Under Article 836(2), the court may reduce compensation for lost profit where the circumstances make such a reduction just and equitable. In assessing the position, the court is to consider factors including expenditure avoided as a result of termination and income earned by using the contractor’s time and labour on other work.

A contractor should not assume, therefore, that its projected profit on the entire uncompleted portion of the contract will automatically be awarded. Equally, an employer cannot safely assume that paying for completed works and documented expenditure will necessarily discharge its obligations. The distinction between costs already incurred, expenditure avoided and profit lost will be important in determining the final amount.

Why Contractual Termination Clauses Matter

The statutory framework makes it important for employers and contractors to examine termination provisions before entering into construction agreements. Contractual terms may prescribe notice periods, procedures for valuing completed work, payment deadlines, the treatment of materials and equipment, and the consequences of termination for convenience. These provisions can help establish a practical process for winding down a project and identifying outstanding obligations.

However, the existence of a contractual termination clause does not, by itself, settle how the agreement interacts with Article 836. Parties should examine whether the agreed mechanism is consistent with the applicable statutory framework and how the contract addresses compensation following withdrawal. They should not assume that a clause automatically displaces the statutory regime or conclusively determines the extent of any entitlement.

Standard-form construction agreements, including FIDIC forms, commonly contain provisions dealing with termination for convenience. Those provisions may be amended substantially during negotiations, however, and the final signed agreement may differ from the published standard form. Employers and contractors should review the executed contract, including any amendments, schedules and supplementary conditions, rather than relying on standard wording that may have been deleted, restricted or replaced.

Documentation and Risk Management

When termination becomes a realistic possibility, accurate and contemporaneous records can make a material difference to the parties’ financial positions. Employers and contractors should maintain clear accounts of completed work, materials held on site, payments made, outstanding invoices and commitments to suppliers and subcontractors. A properly documented record of the project’s position at the termination date can help distinguish genuine liabilities from disputed or unsupported claims.

Contractors should record expenditure attributable to the project and identify costs avoided following termination. They should also retain evidence of resources subsequently deployed on other projects, where relevant to the assessment of lost profit. Employers, meanwhile, should document the reasons for termination, notices served under the contract, the valuation of completed work and the basis for any proposed deductions. These records can help establish whether the parties have complied with their contractual obligations and provide evidence if the compensation claimed is disputed.

A joint inspection and an agreed record of the project’s condition at the termination date may further reduce the scope for disagreement. Such an exercise can identify incomplete works, stored materials, equipment, outstanding payments and continuing liabilities. If the parties cannot agree on the financial consequences, contemporaneous records may become important evidence in subsequent litigation or arbitration. Waiting until a dispute has developed to reconstruct the project’s financial position can make it harder to establish the extent of expenditure, commitments and losses.

Conclusion

Article 836 provides a statutory framework for an employer’s withdrawal from a construction contract before completion, while making clear that the financial consequences may extend beyond payment for work already performed. The provision is particularly relevant where a project is abandoned for commercial reasons rather than because of a contractor’s default. The employer’s decision to stop the works does not, in itself, eliminate the contractor’s potential entitlement to compensation.

Before exercising a termination right, employers should assess the likely cost of withdrawal, while contractors should ensure that their expenditure, outstanding commitments and anticipated profits are supported by reliable evidence. Careful drafting, a review of the executed contract and accurate project records can help both sides manage the commercial and legal consequences of bringing a construction project to an early end.

The applicable law must also be established before any assessment of rights and liabilities begins. Although the new Civil Transactions Law generally took effect on 1 June 2026, contracts concluded before that date may remain subject to the previous law, depending on the applicable transitional provisions and the circumstances of the agreement. Identifying the governing legal framework is therefore an essential first step in determining the parties’ respective rights and obligations when a construction contract is terminated.

Dubai Real Estate Court has cancelled a land sale agreement worth Dh80 million and ordered the seller to refund the buyer Dh30 million already paid, along with annual interest of 5 per cent from the date the claim was filed until full repayment.

The court also directed the seller to pay Dh1.5 million in compensation for the losses arising from her breach of contractual obligations, in addition to court charges, legal expenses and lawyer’s fees.

The dispute arose from an agreement signed in May 2025, under which the buyer agreed to purchase a plot of land in Dubai Silicon Oasis for Dhs80 million. A subsequent agreement dated May 13, 2025, revised the terms of the transaction.

According to court documents, the buyer paid Dh30 million towards the purchase price through three cheques, all of which were confirmed to have been cleared from his account. The remaining Dh50 million was to be paid upon completion of the title transfer at the Dubai Land Department.

After making the initial payment, the buyer sought to complete the transaction and expressed his readiness to pay the outstanding balance against the transfer of ownership. However, the seller failed to attend the Land Department to finalise the process, despite receiving a formal legal notice requesting her to do so.

The seller’s response did not provide a clear and binding commitment to fulfil her contractual obligations, prompting the buyer to approach the court. He sought cancellation of the agreement, repayment of the amount paid and compensation for the resulting losses.

The court found that the buyer had fulfilled his obligations under the agreement by paying the initial amount and demonstrating his readiness to settle the outstanding balance. The seller, however, had failed to meet her obligation to transfer ownership and deliver the property.

On that basis, the court ruled that rescinding the agreement was justified and ordered the parties to be restored to their positions before the transaction.

The court also established that the seller’s breach had deprived the buyer of the opportunity to invest in or otherwise dispose of the property, warranting compensation in addition to the refund and interest.

The Dubai Real Estate Court has ordered a real estate development company to pay Dh1.243 million to a real estate marketing and sales firm for unpaid contractual dues, including project launch expenses and late-payment penalties.

The award includes statutory interest at 5% a year from the date the lawsuit was filed until full payment, as well as court fees, expenses and legal costs.

The dispute arose from an agreement signed in April 2025, under which the plaintiff was granted exclusive rights for one year to manage the marketing and sales of a real estate project.

Under the agreement, the marketing firm was entitled to a commission of 1% of the project's sales value for marketing services and 7.5% for sales services, in addition to fees for organising the project's launch event.

The plaintiff maintained that it had fulfilled its contractual obligations but had not received the full amount due before the developer terminated the agreement in November 2025.

It initially sought Dh1.3 million, covering unpaid marketing and sales commissions, launch event expenses and late-payment penalties.

The court appointed an accounting expert to examine the agreement, the parties' financial records and the services provided. The expert concluded that the plaintiff had met its contractual obligations and calculated the outstanding amount at Dhs1.243 million.

The sum comprised Dh616,000 for project launch activities, Dh599,000 for marketing and sales services, and Dh28,000 in delay penalties.

The defendant disputed some of the commissions and fees, arguing that they were not payable and that the agreement breached real estate brokerage regulations. It also sought a fresh expert review and the recovery of amounts it considered to have been overpaid.

The court rejected these arguments, finding that the agreement combined marketing services with real estate brokerage activities. It held that the nature of the contractual relationship had to be determined by the actual obligations undertaken and work performed, rather than the description given to the agreement.

The court also found that the plaintiff was licensed to undertake real estate brokerage activities, rejecting the argument that the agreement was invalid on regulatory grounds.

It considered the expert's findings and supporting documents sufficient to resolve the dispute and declined to refer the matter for further expert examination.

The court also dismissed the defendant's recovery claim because it had not been presented in accordance with the applicable legal requirements or accompanied by the required fees.

The judgment ordered the developer to pay Dh1.243 million, together with statutory interest, court fees, expenses and legal costs.

Rental disagreements in Dubai can arise over unpaid rent, security deposit deductions, proposed rent increases, tenancy renewals or eviction notices. When landlords and tenants are unable to settle these issues privately, they may need to pursue formal legal proceedings.

The Rental Disputes Centre (RDC) provides a legal mechanism for resolving disputes involving rental properties in Dubai that fall within its jurisdiction. Understanding the filing requirements, applicable fees, necessary documents and legal procedures can help both parties approach a dispute with greater clarity.

Steps to Take Before Filing a Rental Dispute

Before initiating proceedings, landlords and tenants should consider whether the disagreement can be resolved through direct communication. Keeping written records of discussions, payment requests and settlement proposals can be useful if the matter later requires legal intervention.

Certain rental disputes also involve mandatory notice requirements. For example, a landlord seeking eviction because of unpaid rent must generally provide the tenant with 30 days to settle the outstanding amount before pursuing eviction on that ground.

For certain other eviction grounds, including a landlord's intention to sell the property or recover it for qualifying personal use, a minimum of 12 months' notice is required through a Notary Public or registered mail.

The applicable notice period and delivery method depend on the legal grounds for the claim. Failure to comply with these requirements may affect the proceedings.

Documents Required to File a Rental Dispute in Dubai

The RDC may require different documents depending on the nature of the complaint. However, applicants should generally prepare the following:

• A valid Ejari-registered tenancy agreement.
• A valid Emirates ID.
• A bank letter or statement showing the claimant's IBAN.
• Relevant supporting evidence, including emails, messages, payment records, cheques, formal notices or DEWA bills.
• Proof that the required notice was served, particularly in eviction cases.

Additional documentation may be necessary for disputes involving property damage, security deposits or outstanding rental payments. Preparing the evidence before submitting a claim can help reduce procedural complications.

How to File a Rental Dispute Case in Dubai

When efforts to reach an agreement are unsuccessful, an eligible landlord or tenant can initiate proceedings through the Rental Disputes Centre.

Applications can be submitted electronically through the RDC's official website or with assistance from an authorised Real Estate Services Trustee Centre.

The filing process generally involves creating an account, providing the tenancy and dispute details, uploading supporting documents and paying the applicable fees.

Depending on the proceedings, hearings may be conducted remotely through the RDC's tele-litigation facilities.

The RDC also provides an amicable settlement mechanism through which the parties may attempt to resolve their disagreement before proceeding with formal adjudication.

Where settlement is unsuccessful, the dispute may continue through the appropriate judicial process.

How Much Are Rental Dispute Filing Fees in Dubai?

The cost of filing a rental dispute depends on the type of claim and the amount involved.

For claims concerning eviction, lease renewal or termination, the registration fee is generally calculated at 3.5 per cent of the annual rent or applicable lease value, subject to a minimum of Dh500 and a maximum of Dh20,000.

For monetary claims, the fee is generally 3.5 per cent of the amount claimed, subject to a maximum of Dh15,000.

Additional charges may include service fees, knowledge and innovation fees, and other applicable administrative costs.

Applicants should confirm the latest fee schedule and the classification of their claim through the official RDC channels before submitting their application.

Common Mistakes to Avoid When Filing a Rental Dispute

1. Assuming Every Rental Judgment Can Be Appealed

One important consideration is whether the RDC's initial decision can be challenged. Under Article 17 of Dubai Decree No. 26 of 2013, judgments involving claims valued at Dh100,000 or less are generally final at the first-instance level, subject to specified legal exceptions.

Because many residential security deposit disputes involve relatively small amounts, tenants should not assume they will automatically have another opportunity to present their arguments.

Submitting complete evidence and clearly explaining the claim during the initial proceedings is therefore particularly important.

2. Filing a Case Without Sufficient Supporting Evidence

Incomplete documentation can weaken a rental dispute claim or cause procedural delays. In security deposit disputes, relevant evidence may include the tenancy contract, proof of deposit payment, bank statements, signed handover documents, confirmation of key returns, inspection photographs and final utility clearance records.

Move-in and move-out condition reports can also help establish whether damage occurred during the tenancy.

Applicants should organise their documents carefully and avoid relying on the assumption that missing evidence can always be submitted later.

3. Overlooking Arabic Translation Requirements

Arabic is the official language of proceedings before the Rental Disputes Centre. Documents originally prepared in English or another language may need to be accompanied by certified legal Arabic translations.

These can include tenancy agreements, emails, WhatsApp conversations, invoices and other records submitted as evidence.

Where translation is required, using an appropriately authorised legal translator can help avoid delays or difficulties in having documents considered.

4. Selecting the Wrong Filing Procedure

Not every rental dispute is suitable for the same legal procedure. A Payment Order may be available for qualifying monetary debts that satisfy the relevant legal conditions, including requirements concerning the certainty and documentary basis of the debt.

However, where the amount is contested or the dispute requires examination of property damage, repair costs or competing evidence, ordinary rental dispute proceedings may be more appropriate.

Choosing the correct procedure is important because an unsuitable application may encounter objections or procedural difficulties.

5. Confusing Normal Wear and Tear With Property Damage

Disagreements over security deposit deductions frequently arise when landlords and tenants have different interpretations of a property's condition at handover.

Ordinary deterioration resulting from reasonable use should be distinguished from damage caused by negligence, misuse or unauthorised alterations.

For example, minor surface marks or natural paint fading may be different from substantial damage requiring repairs.

Liability depends on the tenancy terms, applicable law, evidence of the property's condition and the circumstances of the alleged damage.

Photographs, inspection records and handover reports can help establish whether deductions from a security deposit are justified.

How Long Does a Rental Dispute Take in Dubai?

The duration of RDC proceedings varies according to the circumstances of the dispute. The RDC's governing framework generally provides for a claim to be determined within 30 days of referral to the relevant tribunal, subject to the possibility of an extension.

However, this does not guarantee that every dispute will be fully resolved within one month. Straightforward cases may be determined after one or two hearings, while more complicated matters can require additional submissions, expert assessments or further examination.

Appeals and enforcement proceedings, where applicable, may extend the overall process. The time required therefore depends on the complexity of the issues, the available evidence and the procedural steps involved.

Can Tenants Stop Paying Rent After Filing a Complaint?

Filing a rental dispute does not automatically suspend a tenant's obligation to pay rent. A tenant who stops making payments without a legally valid basis may face a separate claim for outstanding rent and potentially eviction proceedings, subject to the applicable notice requirements.

Where the dispute concerns a proposed rent increase, tenants should review the applicable Dubai Land Department rental valuation rules and verify whether the landlord has complied with the notice requirements.

Changes to tenancy terms generally require at least 90 days' notice before the contract expires, unless the parties have agreed otherwise.

Tenants should communicate objections in writing, retain supporting correspondence and continue meeting their existing payment obligations.

If a landlord refuses to accept rent, the tenant may consider using the RDC's Offer and Deposit procedure, subject to the applicable requirements and judicial directions.

This mechanism allows a tenant to formally offer payment and, where authorised, deposit the amount through the relevant process.

However, completing an Offer and Deposit procedure does not necessarily resolve the underlying dispute over the correct rental amount or renewal terms.

A separate claim may still be required, and any additional rent subsequently determined to be payable must be settled.

What Happens After the Rental Disputes Centre Issues a Judgment?

Once the RDC delivers its decision, the parties should determine whether the judgment is final or eligible for appeal.

Where an appeal is legally permitted, the general filing deadline is 15 days. The starting point for this period depends on the circumstances of the judgment and any applicable notification requirements.

Not all RDC decisions can be appealed, making it important to review the judgment and relevant procedural rules promptly.

If the decision becomes enforceable and the unsuccessful party fails to comply voluntarily, the successful party can initiate enforcement proceedings through the RDC.

This ordinarily involves opening an execution file and notifying the party required to comply. Under the RDC's published procedures, further enforcement requests may generally be available after seven days from notification, subject to the relevant procedural conditions.

The enforcement measures depend on the orders contained in the judgment. They may involve recovering outstanding money through legally authorised attachment measures, enforcing an eviction order or implementing a decision concerning tenancy renewal.

These measures are carried out under judicial supervision and may apply to landlords or tenants, depending on the outcome of the dispute. Obtaining a favourable judgment and successfully enforcing it are separate legal stages.

Understanding Your Rights Before Starting a Rental Dispute

Whether the disagreement concerns rent, eviction, maintenance obligations or a security deposit, proper preparation can make a significant difference to how a rental dispute proceeds.

Both landlords and tenants should understand the applicable notice requirements, preserve relevant evidence, confirm filing fees and choose the correct legal procedure.

They should also remain aware that commencing proceedings does not automatically change their contractual obligations.

Understanding these requirements can help the parties avoid preventable mistakes and navigate Dubai's rental dispute process more effectively.

A disagreement over a rent increase can become more complicated when a landlord refuses to accept payment. The tenant may be willing to pay the existing rent but unable to reach an agreement over the amount demanded for renewal.

Dubai’s Rental Disputes Centre (RDC) provides an Offer and Deposit service that creates a formal route for offering rent in these circumstances. The procedure allows an applicant to seek a judge’s order to offer rent or property keys to the landlord without deciding the parties’ wider tenancy rights.

However, using the service does not automatically resolve the disagreement. Tenants must distinguish between formally offering a payment and obtaining a ruling on whether a proposed rent increase or renewal condition is lawful.

When Offer and Deposit Can Help

The procedure may be used when a landlord declines to receive rent, including during a disagreement over renewing the tenancy. It can also apply to the return of property keys when a tenant is surrendering the premises and the landlord refuses to accept them. Rather than leaving the payment or handover unresolved, the applicant can ask the RDC to deal with the offer through its prescribed process.

For landlords, this provides an official channel through which the rent or keys can be offered while their position on any outstanding tenancy dispute remains preserved. The process does not require either party’s wider contractual claims to be decided at that stage.

Preparing and Submitting an Application

Applications can be submitted through the RDC website or a Real Estate Services Trustee Centre. Online applicants must register or sign in, select the service, enter the required information and upload their supporting records. The applicable fees are paid after electronic verification, and the judge’s decision becomes available through the website.

The published document requirements include a written Offer and Deposit motion, the applicant’s Emirates ID, the latest signed tenancy contract and a proposed new agreement carrying the same terms and conditions. Copies of the relevant cheques and any correspondence between the parties should also be included. Where the applicant is a company, the latest trade licence and the Emirates ID of the manager named on that licence are required. Documents must be submitted in Arabic or accompanied by a legal Arabic translation.

Tenants should also preserve evidence of their attempts to pay. Emails, messages and written notices can help establish when the rent was offered and how the landlord responded. Keeping these records provides a clearer account of the disagreement than relying only on conversations that were not documented.

Fees Are Separate From the Rent

The published application charges are Dh50 for Offer and Deposit, Dh10 as a Knowledge Fee and Dh10 as an Innovation Fee, bringing the basic total to Dh70. Filing through a Real Estate Services Trustee Centre attracts an additional Dh130 service fee, plus VAT on that service fee.

These charges cover the application process. They are not the rent itself, and paying them does not mean the tenant has completed the required rental payment. The rent must be dealt with separately in accordance with the RDC’s procedure and the judge’s order.

What Happens After the Judge Reviews the Request?

Approval is not automatic. A judge considers the application, and the applicant must check the decision and comply with any directions concerning the deposit of rent or the handover of keys. Submitting the request is therefore only one stage of the process, rather than confirmation that every necessary step has been completed.

The RDC’s guidance states that the landlord is notified once the Centre receives the rental payment. Applicants should provide accurate contact information and confirm that the required notification has taken place. Private emails or WhatsApp messages may help document the dispute, but tenants should not assume that these replace the Centre’s formal notification requirements.

How the Deposited Rent Is Treated

Rent deposited through the prescribed procedure is held in the RDC’s treasury for the landlord. It remains a rental payment, rather than an application charge or a replacement for the tenancy security deposit.

The RDC’s published guidance states that, where its required procedure is followed, the tenant is regarded as having paid from the date the judge accepts the request. Tenants should retain both the judicial order and evidence that the deposit was completed. Filing an application without fulfilling the payment requirements should not be treated as equivalent to paying rent.

The Wider Dispute May Still Need a Decision

An accepted Offer and Deposit application does not, by itself, establish that a rent increase is invalid or secure renewal on the tenant’s preferred terms. Where the disagreement remains unresolved, either party may need to pursue RDC conciliation or the appropriate rental claim to address the underlying issue.

Tenants must also continue meeting rental obligations as they fall due. Article 31 of Dubai’s Law No. 26 of 2007 expressly provides that an eviction claim does not exempt a tenant from paying rent during the proceedings and until the resulting decision is issued and enforced. A pending dispute should therefore not be treated as permission to stop paying.

Renewing a tenancy in Dubai can raise questions about rent increases, agent commissions and registration costs. However, tenants do not have to accept every charge demanded by a landlord or property manager. The rules governing rental increases and tenancy renewals set clear limits on what can be imposed, while official registration fees remain separate from charges linked to renewing a lease.

Here is what tenants need to know about rent increases, renewal fees and other costs when extending a Dubai tenancy contract.

How Much Can Your Landlord Increase the Rent?

Rent increases at renewal are governed by Dubai Decree No. 43 of 2013 and the applicable rental index. Depending on how far the existing rent falls below the average rental value for comparable properties, the permitted increase ranges from zero to a maximum of 20 per cent. The amount a landlord can charge therefore depends on the difference between the current rent and the applicable benchmark, rather than simply on the landlord’s assessment of prevailing market prices.

A landlord must also give the tenant at least 90 days’ written notice of any proposed change to the rent or other terms of the tenancy contract before it expires, unless the parties have agreed otherwise. The Rental Disputes Center (RDC), the judicial body responsible for resolving rental disputes in Dubai, has confirmed the notice requirement for parties seeking to amend tenancy terms. Tenants should therefore check both the proposed increase and whether the required notice has been served.

Can a Landlord Charge a Rent Renewal Fee?

No. In 2020, the RDC clarified that landlords and their representatives, including real estate management companies and leasing offices, cannot charge tenants a fee simply for renewing a tenancy contract. The position is intended to prevent landlords or property managers from adding charges that are not permitted under the applicable rental rules.

The RDC has also stated that landlords and their representatives cannot insert a special clause into a tenancy contract requiring payment of a renewal fee. A charge described as an administrative, lease-renewal or processing fee does not become permissible merely because it is given a different name. Tenants who encounter such demands should ask the landlord or property manager to identify the legal basis for the charge before making payment.

Can a Real Estate Agent Charge a Renewal Fee?

Tenants should examine their tenancy contract and any separate agreement with a real estate agent before agreeing to pay additional charges. The distinction is between a fee imposed simply because a lease is being renewed and payment for a separate service that the tenant has expressly agreed to purchase.

Where an agent has been specifically engaged to negotiate renewal terms or prepare documents, any service charge will depend on the nature of the work, the agreement with the party responsible for payment and the applicable rules. A landlord or property manager cannot, however, automatically impose an arbitrary renewal charge on a tenant as a condition of extending the tenancy. Tenants should establish who commissioned the service and who agreed to pay for it.

Commission and other setup costs should also be distinguished from rent and renewal fees. Before paying an additional amount, tenants should check the terms agreed when the original tenancy was signed and establish whether the charge was clearly disclosed in a separate agreement. A demand made at renewal should not be treated as automatically payable simply because it comes from an agent or property management company.

What About Ejari Renewal Fees?

Ejari registration is a separate matter from any fee charged by a landlord or agent for renewing a lease. The Dubai Land Department (DLD) publishes official charges for registering tenancy contracts, with the amount depending on the registration channel used.

The DLD lists the cost of registering a tenancy contract through the Dubai REST app or its website at Dh177.75, including applicable service partner, knowledge and innovation fees. Registration through a Real Estate Services Trustee Centre carries a listed total of Dh220. Tenants should check the current official fee schedule before paying, as charges and procedures may change.

These amounts relate to official registration services and should not be confused with a landlord’s lease-renewal fee. Before completing a renewal, tenants should review their contract, check any proposed rent increase against the applicable RERA rental index and request an itemised breakdown of additional charges. Where a fee appears inconsistent with the rules, seeking clarification from the landlord or the relevant Dubai Land Department authority can help prevent an unnecessary payment.

Egypt is preparing to overhaul regulation of its real estate development market under a draft law that would establish the Egyptian Federation of Real Estate Developers and introduce new rules governing developer classification, unit sales, buyer protection and stalled projects.

Under the proposed legislation, developers would be required to open a separate bank account for each project or development phase. All payments collected from buyers under sales contracts would have to be deposited into the designated account and could only be used for the relevant project or phase.

Withdrawals from each project account would be linked to the construction schedule and the actual rate of completion. These would be determined on the basis of a report prepared by the project’s appointed consultant and approved by the Egyptian Federation of Real Estate Developers.

According to a preliminary copy of the draft law reviewed by Daily News Egypt, the Ministry of Housing is consulting developers on the proposed provisions before the legislation is submitted to the Cabinet.

Prior Approval Required Before Marketing Projects

The draft would require developers to obtain prior approval from the federation before advertising units for sale, marketing projects or participating in real estate exhibitions.

Developers would also have to deposit amounts specified under the relevant regulations into each project’s designated account, taking into account the size of the project and its development costs.

The measures are intended to strengthen oversight of customer funds and ensure that money collected from buyers is directed towards the projects for which it was paid.

Two Funds Proposed To Protect Buyers

The draft law proposes the establishment of two independent funds to protect customers who contract with real estate developers.

One fund would cover customers dealing with registered real estate developers, while the other would protect customers dealing with companies classified as “deemed real estate developers”.

The Prime Minister would determine the management structure of each fund, contribution rates, the risks covered and the rules governing compensation payments.

The proposed funds are part of a wider framework aimed at reducing risks for property buyers and providing mechanisms to deal with stalled projects and failures to meet contractual obligations.

Mandatory Classification Based On Project Size

Companies operating in the sector would be divided into two categories — “real estate developers” and “deemed real estate developers” — based on the nature and size of their projects.

The first category would include companies developing residential projects and related activities on land of at least five feddans, as well as commercial, administrative, service and tourism projects covering at least one feddan.

Companies developing projects below these thresholds would fall into the “deemed real estate developer” category, provided they have previously completed projects covering at least three feddans and meet requirements relating to experience, financial solvency and their record of violations.

Existing developers would be required to regularise their status within one year of the effective date of the law’s executive regulations.

Federation Registration To Become A Condition For Project Approvals

Registration with the federation would become a prerequisite for developers seeking approval for their projects.

Companies applying for registration would have to include real estate development among their corporate purposes, provide evidence of land ownership or allocation, demonstrate financial solvency and establish that they have not been subject to a final bankruptcy ruling.

Administrative authorities would also be prohibited from approving land subdivisions or issuing project-related licences until they had verified that the company was registered with the federation and had obtained the appropriate classification.

The federation would maintain two electronic registers — one for real estate developers and another for companies classified as “deemed real estate developers”.

Registration and classification information would be publicly available free of charge and updated monthly, allowing prospective buyers to verify a developer’s status before entering into a contract.

Federation To Monitor Market And Settle Disputes

The proposed federation would have wide-ranging responsibilities, including classifying companies, establishing a professional code of conduct, settling disputes, monitoring real estate prices and preparing periodic reports on market activity.

The government is seeking to create a more structured regulatory framework for the real estate development industry as the sector has expanded and concerns have increased over developers’ ability to complete projects and deliver units on schedule.

The proposed framework would also give the federation a central role in monitoring market practices, strengthening professional standards and improving transparency between developers and buyers.

New Mechanisms Proposed For Stalled Projects

The draft law sets out procedures for dealing with developers that fail to implement their projects.

Initially, the developer would receive a formal notification and be given an opportunity to resume construction. If the developer failed to respond or take corrective action, the federation could arrange for another company to complete the project at the original developer’s expense or resort to one of the proposed protection funds.

If the federation did not intervene, the competent administrative authority could assign the project to one or more developers registered with the federation, in accordance with rules to be set out in the executive regulations.

The proposed provisions come as the government has begun identifying stalled real estate projects and assessing their status amid complaints from some buyers over delays in the delivery of units.

CBE Monitors Real Estate Sector Financing

The preparation of the draft law also coincides with regulatory efforts by the Central Bank of Egypt (CBE) to monitor bank financing extended to the real estate sector, including the relationship between financing and actual project implementation rates.

The proposed framework would subject developers’ financial capacity, use of customer funds and progress in project execution to greater scrutiny, while establishing mechanisms intended to protect buyers if projects encounter financial or operational difficulties.

Design defects are among the most challenging issues to resolve in construction disputes as responsibility for a defective element can arise at different stages. A problem can begin with the design, emerge from the manner of execution or result from inadequate supervision. Establishing liability therefore goes beyond identifying the party physically performing the defective work.

The UAE construction liability regime understands these distinctions, though it imposes specific statutory obligations in relation to serious structural defects. Federal Decree by Law No. (25) of 2025 Promulgating the Civil Transactions Law came into force on June 1, 2026, replacing Federal Law No. (5) of 1985 concerning the Civil Transactions Law of the United Arab Emirates. The construction (muqawala) provisions are mainly contained in Articles 812 to 839, while the decennial liability regime is addressed in Articles 821 to 824.

Which Law Applies?

The starting point is determining which law governs the dispute. The new Civil Transactions Law generally operates prospectively while contracts concluded before June 1, 2026 remain subject to the previous law, subject to applicable transitional provisions, including those relating to limitation periods. Where a construction contract was entered into before that date, the relevant provisions of the former law should therefore be considered. Under that legislation, the construction provisions were contained in Articles 872 to 896, with decennial liability addressed in Articles 880 to 883.

Many of the muqawala provisions are default rules and can be modified by agreement between the parties, subject to mandatory statutory protections, including those governing decennial liability. It is therefore not enough to consider the legislation in isolation. The construction contract, its schedules and technical documents must be read alongside the applicable statutory provisions to establish how responsibility was allocated.

Design Responsibility And Workmanship

The first substantive issue is whether the alleged defect lies in the design itself or in the contractor's execution of that design.

Article 822(1) of the new Civil Transactions Law provides that an engineer whose role is confined to preparing the design is responsible for defects attributable to the design, but not for defects from the method of execution. Where the contractor has responsibility for carrying out the works and departs from approved drawings, specifications or the agreed methodology, responsibility may instead lie with the contractor.

The distinction can become particularly important when a contractor argues that it simply followed instructions issued by the employer or consultant. Approval of a drawing does not necessarily absolve a contractor from responsibility for poor workmanship or an improper method of execution. At the same time, a contractor should not automatically become responsible for a fundamental design error simply because it constructed the faulty element.

The contractual allocation of duties is therefore critical. The scope of services, specifications, drawings, method statements, approvals, site instructions and project correspondence should be considered together. These documents can help identify what each party was expected to identify, review, approve or execute.

Design-And-Build Contracts

The analysis becomes more complicated under a design-and-build arrangement. Unlike a traditional build-only contract, the contractor may take responsibility for both designing and executing the works. Its obligations may consequently extend beyond workmanship to the adequacy, integration and coordination of the design.

A contractor cannot necessarily avoid responsibility by arguing that a defect originated with a designer if it had accepted overall design responsibility under the contract. Conversely, an employer seeking compensation must establish the relevant contractual obligation and demonstrate a connection between the alleged design deficiency and the loss suffered.

Design responsibility, review obligations, reliance on information supplied by the employer and procedures for raising discrepancies should therefore be addressed clearly in the contract. Equally important is the project record: concerns about drawings, specifications or design coordination should be raised promptly and documented rather than left to be reconstructed after a dispute has arisen.

Employer-Provided Specifications

Another complication arises where the employer provides specifications, drawings or design criteria. A contractor may argue that it was contractually obligated to build in accordance with that information and should not be held responsible for an inherent defect in the employer's design.

Article 816(3) requires the contractor, where the contract does not provide otherwise, to notify the employer immediately if defects appear in materials supplied by the employer or if other circumstances prevent proper execution. A failure to give notice may expose the contractor to liability for the consequences.

The provision does not explicitly refer to designs supplied by the employer, and its application to design inconsistencies has yet to receive clear judicial treatment. It may nevertheless be argued that a serious design inconsistency or impractical detail consists of an “other factor” that prevents proper execution. For contractors, the safer approach is therefore to raise concerns in writing as soon as an apparent design problem affecting execution is identified, or ought reasonably to have been identified.

The Consultant's Role In Supervision

Supervision raises a separate question. Under Article 822(1), an engineer whose appointment is limited to design is responsible for defects attributable to that design. Article 822(2), however, provides that an engineer whose role is limited to supervising execution is jointly liable with the contractor for execution defects occurring under that engineer's supervision. The previous law addressed the position of a design-only engineer but did not explicitly deal with a supervision-only engineer in the same way.

The precise scope of the consultant's appointment is therefore important. Attendance at a site or periodic inspection does not necessarily mean that a consultant took on responsibility for every aspect of construction. However, where supervision forms part of the consultant's contractual duties, shortcomings in that supervision may lead to liability.

The distinction can be particularly important in major projects involving several layers of consultants, specialist contractors and subcontractors. The question is not simply whether a consultant visited the site, but what the consultant was contractually required to inspect, monitor, approve or report and whether the alleged defect falls within those responsibilities.

Where Several Parties Contributed To The Defect

Construction defects often have more than one cause. A design omission may be compounded by an inappropriate construction method, inadequate inspection, poor materials, insufficient testing or subsequent alterations. Expert evidence can therefore play a central role in determining technical causation.

A construction expert may review design documents, specifications, site records, inspection reports, testing results, correspondence, photographs and as-built information to determine how the defect developed and whether the conduct of more than one party contributed to the consequence.

This distinction matters because contractual responsibility and technical causation do not always point to the same party. Evidence must establish not only what failed, but how and why it failed, which party was responsible for the relevant stage of the works and whether another participant contributed to the resulting damage.

In a complex dispute, the chronology can be as important as the technical evidence. A contractor's discovery of a design inconsistency, a consultant's approval of a revised detail or an employer's instruction to proceed despite a warning may each affect the eventual assessment of responsibility.

The Statutory Decennial Regime

The statutory decennial liability regime operates alongside the contractual analysis described above. Article 821 makes the contractor and engineer jointly and severally liable to the employer for ten years for the total or partial collapse of buildings or fixed installations, as well as defects that threaten their structural integrity and safety. Under Article 821(1), the regime applies where the engineer prepared the design for execution by the contractor under the engineer's supervision. Where the engineer's role is limited to design without supervision, Article 822(1) confines the engineer's liability to defects attributable to the design.

The decennial regime does not depend on establishing fault. Liability may still arise where the defect resulted from a problem with the ground or the employer authorised the defective work. A contractor engaged on a build-only basis may therefore still face decennial liability even though it did not take on the design.

Article 823 provides that any agreement seeking to exclude or limit this liability is void. Article 824 further requires a claim to be brought within three years from the collapse or discovery of the defect.

Article 821(4) provides that the statutory decennial regime does not govern the contractor's recourse against subcontractors. Any such claim must instead be determined under the relevant contractual arrangements and applicable general legal principles.

Conclusion

Responsibility for a design defect in a UAE construction project cannot be determined simply by asking whether the contractor, consultant or designer was involved in the affected work. The answer depends on the law applicable to the contract, the contractual allocation of design, execution and supervision responsibilities, the nature and seriousness of the defect, the conduct of the parties during construction and the technical evidence establishing causation.

For developers, contractors and engineering consultants, clearly defined scopes of responsibility remain one of the best ways of reducing uncertainty. Prompt notice of design or execution concerns, careful documentation of instructions and approvals and comprehensive project records can also prove critical when a defect later develops into a dispute. In projects involving several professionals and contractual layers, the parties' responsibilities should be clear before construction begins rather than reconstructed after the failure occurs.