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Although the term “maritime insolvency” is widely used in practice, the UAE does not maintain a separate insolvency regime exclusively for maritime businesses. Instead, maritime insolvency issues are addressed through the interaction of maritime legislation, bankruptcy and restructuring laws, and civil enforcement procedures.

Maritime insolvency generally arises when a shipowner, operator or charterer is unable to meet financial obligations as they fall due or becomes subject to formal restructuring or bankruptcy proceedings.

Unlike conventional corporate insolvency, maritime insolvency typically involves high-value movable assets operating across multiple jurisdictions. A vessel may be registered in one country, financed by lenders in another, operated under a charterparty governed by a third legal system, and arrested or subjected to enforcement proceedings in an entirely different jurisdiction.

Consequently, maritime insolvency often raises complex legal questions concerning:

• Ownership and beneficial interests in vessels;
• Enforcement of ship mortgages and other security interests;
• Arrest and judicial sale of vessels;
• Priority of maritime claims and liens;
• Rights of cargo interests, suppliers and crew members;
• Cross-border recognition of insolvency proceedings; and
• Restructuring of maritime businesses.
  
  

For creditors, timing is often critical, as vessel values and market conditions may fluctuate significantly during insolvency proceedings.

Vessel Arrest as a Creditor Protection Tool

One of the most powerful remedies available under UAE maritime law is the arrest of a vessel.

A vessel may be arrested to secure recognised maritime claims, including disputes arising from charterparties, ship mortgages, unpaid bunkers, crew wages, cargo damage, salvage operations, port charges and other maritime obligations recognised by law.

Importantly, insolvency alone does not automatically entitle a creditor to arrest a vessel. A claimant must generally establish a qualifying maritime claim that falls within the scope of applicable maritime legislation.

Where a shipowner defaults and a qualifying maritime claim exists, creditors frequently seek precautionary arrest orders to prevent a vessel from leaving UAE waters before adequate security is provided or the underlying dispute is resolved.

From a practical standpoint, vessel arrest serves two key purposes. First, it creates immediate commercial pressure because a detained vessel cannot continue trading and may incur substantial losses. Second, it enables creditors to secure an asset that could otherwise move beyond the reach of local enforcement mechanisms.

In insolvency scenarios, arrest proceedings often become highly contested as multiple creditors attempt to preserve their respective rights against the same vessel.

Ship Mortgages and Secured Creditors

The shipping industry relies heavily on debt financing, with vessels commonly funded through loans secured by registered ship mortgages.

A properly registered ship mortgage grants lenders a proprietary security interest in the vessel and generally places them in a stronger position than unsecured creditors when a shipowner encounters financial difficulties.

Upon default, mortgagees may pursue a range of enforcement remedies, including:

• Acceleration of loan obligations;
• Commencement of judicial enforcement proceedings;
• Arrest of the vessel where appropriate;
• Judicial sale of the vessel; and
• Recovery from sale proceeds in accordance with applicable priority rules.
  
  

However, the position of mortgage lenders is not absolute. Enforcement outcomes may be affected by competing maritime claims, statutory rights and maritime liens recognised under applicable law.

Accordingly, lenders must carefully assess both the vessel’s value and the nature of competing claims before commencing enforcement proceedings.

Maritime Liens and Priority of Claims

One of the most complex aspects of maritime insolvency concerns the ranking and priority of creditor claims.

Maritime law distinguishes between various categories of claims, including maritime liens, statutory maritime claims and contractual claims. Not every maritime claim automatically gives rise to a maritime lien, and the classification of a claim can significantly influence enforcement outcomes.

Certain claims may receive enhanced protection under maritime law, including those relating to:

• Crew wages and employment-related obligations;
• Salvage operations;
• Collision-related liabilities;
• Port and harbour charges; and
• Other maritime claims recognised by applicable legislation.
  
  

Maritime liens are particularly significant because they may attach directly to the vessel itself and, depending on the circumstances, enjoy priority over other creditor interests, including certain secured claims.

Because priority disputes are often highly fact-specific, creditors should conduct a comprehensive assessment of all competing claims before relying solely on the vessel’s value as security.

For financial institutions and maritime investors, understanding claim priority remains a critical component of effective maritime risk management.

Crew Wage Claims and Employee Protections

Crew wage claims occupy a particularly important position in maritime insolvency proceedings.

When shipowners experience financial distress, crew members may face unpaid wages, repatriation concerns and other employment-related issues. Maritime law traditionally affords substantial protection to seafarers, reflecting both public policy considerations and the unique nature of maritime employment.

As a result, crew claims frequently play a prominent role in arrest proceedings, enforcement actions and the distribution of proceeds following judicial sales. Shipowners, lenders and insolvency practitioners must therefore carefully consider crew-related obligations when evaluating insolvency risks and enforcement strategies.

Charterer Insolvency and Commercial Consequences

Insolvency risks are not limited to shipowners. Charterers may also encounter financial difficulties, particularly during periods of market volatility, declining freight demand or wider economic disruption.

The insolvency of a charterer can create significant commercial challenges for vessel owners, including:

• Unpaid hire;
• Termination disputes;
• Cargo delivery complications;
• Off-hire disputes;
• Claims for damages; and
• Difficulties recovering operational expenses.
  
  

Whether a shipowner may terminate a charterparty following a charterer’s insolvency will often depend on the terms of the relevant charterparty, including the insolvency and default provisions negotiated by the parties.

Given the substantial financial exposure associated with charterparty arrangements, carefully drafted insolvency clauses have become increasingly important in modern maritime transactions.

Restructuring and Business Rescue Opportunities

Not every maritime insolvency results in vessel arrests or liquidation.

In recent years, the UAE has continued to strengthen restructuring and business rescue mechanisms aimed at preserving viable businesses while balancing creditor interests. Depending on the circumstances, distressed maritime companies may utilise restructuring procedures available under applicable insolvency legislation to stabilise operations and negotiate with creditors.

Restructuring processes may provide opportunities to:

• Negotiate with creditors;
• Reschedule debt obligations;
• Preserve vessel operations;
• Maintain employment relationships; and
• Avoid value-destructive liquidation proceedings.
  
  

From a commercial perspective, restructuring may deliver better outcomes than immediate asset sales, particularly during depressed shipping markets where vessel values have fallen significantly.

Consequently, lenders, shipowners and insolvency professionals increasingly view restructuring as a practical alternative to immediate enforcement where a viable business can be preserved.

Cross-Border Challenges in Maritime Insolvency

Shipping is inherently international, and maritime insolvencies frequently involve multiple jurisdictions.

A vessel owned by a foreign company may enter UAE waters while simultaneously being subject to insolvency proceedings elsewhere. Creditors may pursue enforcement actions in different jurisdictions at the same time, creating complex questions concerning jurisdiction, recognition of foreign proceedings, claim priority and asset recovery.

The legal position may also vary depending on whether proceedings involve mainland UAE courts, the DIFC or the ADGM, each of which operates under a distinct legislative framework.

As a result, cross-border insolvency matters often require close coordination between courts, lenders, insolvency practitioners, maritime authorities and legal advisers across multiple jurisdictions.

For internationally active maritime businesses, proactive legal planning is essential to ensure that financing arrangements, charterparties and security interests remain effective and enforceable across borders.

Conclusion

Maritime insolvency presents unique legal and commercial challenges that distinguish it from conventional corporate insolvency. Whether involving a defaulting shipowner, an insolvent charterer or a financially distressed maritime group, stakeholders must navigate a complex framework of vessel arrests, ship mortgages, creditor priorities, maritime liens, restructuring procedures and cross-border enforcement issues.

For lenders, shipowners, charterers, insurers and maritime service providers, early legal intervention is often critical to protecting commercial interests and preserving asset value. The UAE’s maritime and insolvency frameworks provide a range of enforcement and restructuring mechanisms for creditors and distressed maritime businesses, but successful outcomes depend on careful planning, effective risk management and a thorough understanding of applicable legal rights.

As global shipping markets continue to evolve, maritime insolvency will remain a significant area of legal and commercial risk for participants across the maritime sector.

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The UAE has introduced updated rules governing the Wage Protection System (WPS), providing greater clarity on the categories of employees and establishments that are exempt from the salary monitoring framework. The provisions are contained in Ministerial Resolution No. 0340 of 2026 Concerning the Wage Protection System, which specifies circumstances in which employers are not required to process salary payments through the WPS.

One of the key exemptions relates to employees who are on approved unpaid leave. Under the resolution, a worker on unpaid leave is excluded from the Wage Protection System during the period of the approved leave. However, employers are required to notify the Ministry of Human Resources and Emiratisation (MOHRE) and submit the relevant supporting documents in accordance with the prescribed procedures. Failure to notify the ministry may result in the employee continuing to appear as unpaid under the system.

The resolution also exempts workers involved in wage-related legal disputes. Employees whose wage claims have been referred to the competent court, or in respect of whom an executive instrument has been issued, are not covered by the WPS for the duration of the dispute or enforcement process. This provision recognises that salary issues in such cases are subject to judicial proceedings rather than routine payroll monitoring.

Another category includes workers against whom an absconding report has been filed. Since such employees are no longer actively reporting to work and their employment status is under review, they are excluded from the system's salary payment requirements.

Employees whose liberty has been restricted pursuant to a court order, judgment, or other lawful authority are also exempt. In such situations, employers must notify MOHRE and provide supporting documentation confirming the worker's status before the exemption can be applied.

The resolution further excludes seafarers working on ships, provided that the establishment submits a request seeking the exemption. Similarly, foreign workers employed by overseas establishments or their branches operating in the UAE may be excluded when their salaries are paid outside the country, subject to a request from the employer.

Workers holding mission work permits for periods not exceeding three months are also outside the scope of the Wage Protection System. The exemption reflects the temporary nature of such employment arrangements.

In addition to employee-specific exemptions, the resolution identifies certain sectors and entities that are not subject to the Wage Protection System. These include fishing boats owned by individual UAE citizens and public taxis owned by individual citizens. Banks and financial institutions are likewise exempt from the WPS requirements, as are places of worship.

The updated framework aims to ensure that the Wage Protection System remains focused on monitoring salary compliance for the categories of workers for whom it was designed, while providing clear guidance on situations where alternative legal, administrative, or sector-specific arrangements apply. Employers relying on any of the exemptions should ensure that all notification and documentation requirements are fulfilled to avoid potential compliance issues with MoHRE.

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The UAE's decision to lower the age of legal majority from 21 lunar years to 18 Gregorian years marks one of the most significant personal status and civil law reforms in recent years. Introduced under Federal Decree-Law No. 25 of 2025, the new Civil Transactions Law came into force on June 1, 2026, replacing the Civil Transactions Law of 1985.

While much of the public attention has focused on the headline change itself, the reform carries far-reaching consequences for estate planning, inheritance administration, family wealth preservation, and guardianship arrangements across the UAE.

From June 1, 2026, any individual who has completed 18 Gregorian years and possesses full mental capacity is recognised as a legal adult. This means they can independently enter contracts, own and manage assets, initiate legal proceedings, and exercise rights that previously became available only at 21.

For families with existing wills, trusts, succession plans, and asset-holding structures, the change is not merely procedural. It alters the legal foundation on which many estate planning arrangements were originally built.

A Fundamental Shift in Succession Planning

For decades, many estate plans in the UAE assumed that children would remain legal minors until the age of 21. Consequently, wills, guardianship provisions, trust arrangements, and inheritance structures were often designed around that benchmark.

With the age of majority now reduced by up to three years, beneficiaries may gain legal control over inherited assets much earlier than originally anticipated. In many cases, this could accelerate the transfer of significant wealth, business interests, investment portfolios, and real estate holdings.

The change raises an important question for families: Do existing estate plans still achieve the outcomes originally intended by the testator or settlor?

What the New Law Provides

Article 15 of Federal Decree-Law No. 25 of 2025 states:

"A person reaches the age of majority upon completing eighteen (18) Gregorian years."

The law also introduces a notable mechanism aimed at encouraging early economic participation. A minor who has reached the age of 15 may apply, through a guardian or trustee, for judicial authorisation to manage all or part of their assets. Any such authority remains subject to court approval and oversight.

Together, these provisions reflect a broader policy shift towards recognising greater financial and legal autonomy for young adults and, in certain circumstances, older minors.

Impact on Existing Wills

One of the most immediate areas affected by the reform is testamentary planning.

Many wills registered in the UAE, including those prepared through the DIFC Wills Service, were drafted on the assumption that beneficiaries would remain minors until 21. Distribution provisions, executor powers, guardianship clauses, and asset release mechanisms may therefore be linked to that age threshold.

Under the new framework, beneficiaries who have reached 18 may acquire the legal capacity to receive and manage inherited assets directly unless the will expressly provides otherwise.

This creates potential challenges where the testator intended a longer period of protection or oversight but relied on the statutory definition of minority rather than clearly specifying alternative arrangements.

Importantly, while existing wills remain legally valid, their practical operation may differ from what was originally envisaged. The DIFC Wills Service has already aligned its age-of-majority threshold with the new framework from 2 March 2026.

Guardianship Arrangements May End Earlier Than Expected

The reform also has significant implications for guardianship planning.

Guardianship appointments made through wills, court orders, or notarial instruments generally operate until a child reaches legal adulthood. With adulthood now commencing at 18, guardianship arrangements may terminate up to three years earlier than families anticipated.

For parents who intended ongoing supervision of substantial assets, family businesses, or complex investment portfolios beyond age 18, reliance on guardianship provisions alone may no longer be sufficient.

Instead, additional legal mechanisms such as trusts, phased distribution structures, conditional inheritances, or other succession planning tools may be required to preserve the intended level of oversight.

Trust Structures Require Fresh Review

Trusts and family wealth structures are particularly sensitive to changes in legal capacity rules.

Many trust arrangements are designed around gradual wealth transfers, with trustees retaining control until beneficiaries reach a specified age or milestone. The reduction in the age of majority could affect how beneficiary rights are interpreted, when control shifts, and how trustee obligations are discharged.

Families with significant business holdings, investment portfolios, or cross-border assets should review trust documentation carefully to ensure that distribution ages, trustee powers, and succession objectives remain aligned with their original intentions.

The reform serves as a reminder that even well-drafted structures may require periodic review when the underlying legal framework changes.

Implications for Probate and Estate Administration

The effects of the new law extend beyond future planning and into ongoing probate matters.

Historically, assets held on behalf of minor beneficiaries often remained under court supervision until the beneficiary reached 21. Under the new legal framework, beneficiaries aged 18 and above possess full legal capacity to receive assets, execute documents, and participate directly in probate proceedings.

This could accelerate the administration of estates and reduce the need for guardian involvement in certain cases. Executors and administrators handling ongoing matters should therefore assess whether beneficiaries who have attained 18 years of age are now entitled to receive assets or exercise rights previously deferred until 21.

Beyond Estate Planning: A Wider Economic Impact

The reform is also likely to have broader commercial and economic implications.

Young adults aged 18 to 20 can now independently enter into contracts, manage investments, establish businesses, participate in legal proceedings, and exercise ownership rights without restrictions linked to minority status.

As a result, families involved in family-owned enterprises, investment structures, and entrepreneurial ventures may increasingly involve younger generations in business and wealth management decisions at an earlier stage.

The introduction of court-approved asset management rights from age 15 further reinforces the UAE's broader objective of encouraging financial participation and economic responsibility among younger individuals.

Key Changes at a Glance

Looking Ahead

Federal Decree-Law No. 25 of 2025 does not invalidate existing estate planning arrangements. However, it fundamentally changes the legal baseline against which those arrangements operate.

For many families, the issue is not whether their wills, trusts, or guardianship instruments remain valid, but whether they will continue to deliver the outcomes originally intended.

The reduction of the age of majority from 21 to 18 may accelerate inheritance rights, shorten guardianship periods, alter trust administration, and bring forward the transfer of wealth and decision-making authority.

As the new framework takes effect, a comprehensive review of existing succession and estate planning arrangements may help families avoid unintended consequences and ensure that their long-term wealth preservation objectives remain protected.

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Under Law No. 26 of 2007 Regulating the Relationship between Landlords and Tenants in the Emirate of Dubai, a tenant is prohibited from making changes to a rented property or carrying out restoration and maintenance works without first obtaining the landlord's permission and any necessary approvals from the relevant authorities. This means that modifications to areas such as kitchens, balconies, walls, electrical systems, plumbing installations, or other parts of the property generally require prior consent.

The requirement extends beyond obtaining a landlord's approval. Depending on the nature of the proposed work, tenants may also need permits or approvals from competent government authorities, developers, owners' associations, or building management entities. Carrying out unauthorised works could expose tenants to legal consequences and disputes with landlords.

Dubai's tenancy legislation also grants landlords the right to seek eviction before the expiry of a lease in certain situations involving damage or unauthorised alterations. Under Law No. 33 of 2008, which amended the earlier tenancy law, a landlord may pursue eviction if a tenant makes changes that endanger the safety of the property in a manner that makes restoration to its original condition impossible. The same provision applies where damage results from a tenant's deliberate actions, gross negligence, or failure to exercise reasonable care.

These protections are intended to preserve the structural integrity and safety of residential properties while ensuring that landlords retain control over significant alterations made to their assets. They also help prevent disputes over restoration costs and liability when a tenancy comes to an end.

As a result, tenants considering any modification to a rented apartment should obtain prior written approval from the landlord before commencing work. Where required, they should also secure the necessary permissions from the relevant authorities or building management. Taking these steps can help avoid tenancy disputes, potential eviction proceedings, and claims for compensation arising from unauthorised alterations to the property.

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 For any enquiries or information, contact ask@tlr.ae or call us on +971 52 644 3004. Follow The Law Reporters on WhatsApp Channels.

 For any enquiries or information, contact ask@tlr.ae or call us on +971 52 644 3004. Follow The Law Reporters on WhatsApp Channels.

The latest WPS reform fundamentally changes this position by introducing a stricter salary payment regime and accelerated enforcement mechanisms. The Resolution repeals Ministerial Resolution No. 598 of 2022 and establishes a new compliance framework applicable to private-sector establishments registered with MoHRE.

Mandatory Salary Payment on the First Day of Each Month

The most significant reform introduced by the Resolution is the establishment of a unified salary payment deadline.

From June 1, 2026, wages for the preceding Gregorian month must be paid on the first day of the following month through approved WPS channels or other payment systems authorised by MoHRE. Any payment made after that date is treated as delayed.

This represents a substantial departure from the previous regime, under which employers effectively benefited from a longer payment window before regulatory action commenced. The new framework leaves little room for administrative delays, payroll processing errors or cash-flow-related postponements.

For employers, the practical implication is clear: payroll cycles must be recalibrated to ensure that salary transfers are completed and reflected within the WPS by the first day of every month.

Abolition of the Previous Grace Period

A particularly noteworthy feature of the Resolution is the elimination of the historical grace period.

Under the previous framework, enforcement measures generally commenced only after a specified period had elapsed following the salary due date. The new amendment abolishes that flexibility entirely. The first day of each month now constitutes a hard statutory deadline, regardless of weekends, public holidays, banking processing times or administrative considerations.

This amendment significantly increases employer exposure to compliance risk and requires payroll departments to adopt a more proactive approach to salary processing.

Introduction of the 85 Per Cent Compliance Threshold

The Resolution also introduces a new compliance measurement methodology.

An establishment will generally be considered compliant where at least 85 per cent of total wages due to employees are paid within the prescribed timeframe. Similarly, an employee may be regarded as having received payment where at least 85 per cent of the salary entitlement has been transferred, subject to lawful deductions.

Although this threshold provides limited operational flexibility, it should not be viewed as a licence for partial payment. MoHRE retains broad enforcement powers and may investigate circumstances involving systematic underpayment or abuse of permitted deductions.

Accelerated Enforcement Measures

Perhaps the most striking aspect of the new Resolution is the introduction of a substantially faster enforcement framework.

The Resolution establishes an escalating sequence of regulatory interventions triggered shortly after non-compliance occurs. Initial notifications and electronic alerts may be issued within days of a missed payment deadline, followed by restrictions on work permit issuance and additional administrative measures for continuing breaches.

The revised framework demonstrates a clear policy objective: ensuring that wage defaults are identified and addressed at an early stage before they develop into large-scale labour disputes.

For employers, this means that payroll non-compliance can no longer be treated as an issue that can be rectified weeks after the salary due date. Regulatory consequences now arise far more rapidly than under the previous system.

Increased Regulatory Monitoring

The Resolution should also be viewed within the broader context of the UAE’s increasing reliance on technology-driven compliance monitoring.

The enhanced WPS framework enables closer scrutiny of salary payment practices and facilitates faster detection of non-compliance. By leveraging electronic reporting and real-time payroll monitoring, MoHRE is positioned to identify wage payment breaches with greater efficiency than ever before.

As a result, employers should expect reduced tolerance for administrative failures and greater emphasis on demonstrable payroll compliance.

Practical Implications for Employers

The introduction of Resolution No. 340 of 2026 necessitates an immediate operational review by UAE employers.

Human resources, finance and payroll teams should work collaboratively to ensure that salary processing schedules are aligned with the new statutory deadline. Internal controls should be reviewed, payroll funding should occur sufficiently in advance of the payment date, and contingency procedures should be established to address banking or system-related delays.

Employers should also conduct periodic audits of WPS compliance and ensure that documentary evidence supporting salary payments is retained and readily accessible in the event of a regulatory review.

Conclusion

The latest amendment to the WPS framework marks one of the most significant developments in UAE employment law in 2026. By imposing a unified salary payment deadline, abolishing the previous grace period, introducing new compliance thresholds and accelerating enforcement mechanisms, the Resolution materially strengthens employee wage protection across the private sector.

The reform underscores the UAE’s continued commitment to ensuring prompt salary payments and maintaining a transparent and well-regulated labour market. Employers that fail to adapt their payroll processes to the new requirements face increased regulatory scrutiny and potentially significant operational consequences. Conversely, organisations that proactively align their systems with the revised framework will be better positioned to maintain compliance and minimise employment-related risk in an increasingly regulated environment.

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Workers employed in Dubai and holding residence visas issued by the emirate may also access additional reporting channels, including services available through Dubai Police for employment-related grievances involving wages, workplace conditions and other labour concerns.

The UAE's labour framework is designed to balance legitimate administrative requirements with the protection of workers' rights. While employers may temporarily hold passports for official processing, the law does not allow them to retain those documents beyond the purpose for which they were provided. Employees who believe their passports are being unlawfully withheld are entitled to request their return and seek assistance from labour authorities, diplomatic missions and other relevant institutions.

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The latest guidance forms part of Saudi Arabia’s broader efforts to establish clearer procedures for foreign investment and real estate ownership. Earlier, on January 22, 2026, the Real Estate General Authority announced that the Non-Saudi Property Ownership System had entered into force and that non-Saudi companies without a presence in the Kingdom must first register with the Ministry of Investment through the Invest Saudi platform and obtain the Unified Number 700 before completing ownership procedures electronically.

Taken together, these measures provide non-resident foreign companies with a more structured route to property ownership in Saudi Arabia. By detailing documentation requirements, representative arrangements, digital identification procedures and ongoing update obligations, the Investor Guide enhances procedural certainty for foreign investors, advisers and participants in the Kingdom’s real estate market.

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Sharjah’s real estate sector has emerged as one of the UAE’s most dynamic and fast-growing markets, driven by rising residential demand, commercial development, and strategic investment opportunities.


As property transactions continue to increase, ensuring contractual compliance has become critical for landlords, tenants, and investors alike. Delays, disputes, or contractual breaches can create significant financial and legal challenges, making it essential for parties to understand both their rights and the judicial mechanisms available to enforce them.


This article provides a practical overview of Sharjah’s real estate enforcement framework, guiding readers through the legal requirements, remedies, and procedural pathways available from contract formation to dispute resolution before the courts and the Rental Disputes Centre (RDC).

Legal Framework and Key Protections

The enforcement of real estate contracts in Sharjah is governed by both federal and emirate-level legislation.

At the federal level, the Civil Transactions Law (Federal Law No. 5 of 1985) regulates contractual obligations across the UAE. For a contract to be valid, it must have a lawful subject matter, a valid cause, competent parties, and mutual consent. Article 246 requires contracts to be performed in good faith, promoting fairness and integrity in contractual dealings. Unlike common law jurisdictions, UAE law presumes the existence of a valid cause and does not require consideration, thereby simplifying enforcement while maintaining legal certainty.

At the emirate level, Sharjah Law No. 5 of 2024 on Property Leasing represents a significant reform. The law governs residential, commercial, industrial, and professional leases and requires tenancy contracts to be certified by Sharjah Municipality within 15 days. Certified contracts are enforceable before the RDC, while failure to register may expose landlords to administrative penalties.

The law also introduces minimum protection periods for tenants. Residential tenants are protected for three years, while commercial and industrial tenants enjoy protection for five years, except in cases involving statutory grounds such as non-payment of rent, unauthorised subletting, unlawful use of the property, or bona fide personal use by the landlord following proper notice. Early termination by tenants is permitted only in exceptional circumstances, with compensation typically set at 30 per cent of the remaining rent unless otherwise agreed by the parties.

Complementing this framework, Sharjah Law No. 6 of 2024 formally established the RDC as a specialised judicial body with exclusive jurisdiction over tenancy disputes. In addition, Executive Council Resolution No. 37 of 2024 regulates project registration, developer escrow accounts, and financial transparency, strengthening investor protection and promoting orderly market practices.

Court Jurisdiction and Dispute Resolution

Real estate disputes in Sharjah are resolved either through the ordinary courts or the specialised RDC, depending on the nature of the claim.

The ordinary courts, comprising the Court of First Instance, Court of Appeal, and Court of Cassation, hear civil and commercial disputes, including breaches of sale and purchase agreements, off-plan property disputes, construction-related claims, mortgage disputes, and compensation actions.

The RDC has exclusive jurisdiction over landlord-tenant disputes, including eviction proceedings, rent recovery claims, lease renewals, contract terminations, and the enforcement of tenancy obligations. By centralising tenancy-related matters, the RDC promotes efficient dispute resolution through judges and administrative staff with specialised expertise in real estate law. Identifying the correct forum is essential to preserving procedural rights and securing enforceable outcomes.

Judicial Remedies: Protecting Real Estate Interests

Sharjah law provides several remedies to enforce real estate contracts and safeguard the rights of contracting parties.

Specific Performance

Courts may order parties to fulfil their contractual obligations, including transferring ownership, handing over possession, or completing registration formalities. Where specific performance is impossible, courts may award monetary compensation to ensure that legal rights are adequately protected.

Judicial Termination

In cases involving a material breach of contract, courts may terminate the agreement under Article 272 of the Civil Code. Before seeking termination, the aggrieved party must generally serve a formal notice, allowing the defaulting party an opportunity to remedy the breach. Depending on the circumstances, the court may grant additional time for compliance, award compensation, or terminate the contract and restore the parties to their pre-contractual positions.

Compensation and Eviction

Parties may claim damages for actual and proven losses resulting from a contractual breach. While penalty clauses are generally recognised under UAE law, courts retain the authority to adjust them to reflect the actual loss suffered. Eviction orders may be granted where statutory grounds exist, including non-payment of rent or unauthorised use of the property, and may be enforced through the relevant execution authorities.

Together, these remedies enable landlords, tenants, and investors to enforce their rights effectively and ensure that contractual obligations are respected.

Practical Challenges and Best Practices

The enforcement of real estate contracts in Sharjah may be affected by several practical challenges, including:

• Ambiguously drafted contracts
• Failure to comply with certification requirements
• Lengthy litigation in complex disputes
• Translation requirements for documents prepared in foreign languages
  
  

To minimise these risks, parties should:

• Engage professional legal drafting services
• Certify tenancy agreements within the mandatory 15-day period
• Maintain accurate records of payments and correspondence
• Conduct comprehensive due diligence before signing agreements
• Include clear dispute resolution and termination provisions
• Serve formal notices promptly under Article 272 to preserve termination rights
  
  

Conclusion

The enforcement of real estate contracts in Sharjah combines established federal legal principles with recent emirate-level reforms, including Laws No. 5 and 6 of 2024 and Executive Council Resolution No. 37 of 2024. Together, these measures introduce stronger tenant protections, clearer enforcement mechanisms, and a dedicated Rental Disputes Centre to handle tenancy-related claims.

For landlords, tenants, and investors, understanding certification requirements, statutory protection periods, eviction grounds, and procedural obligations is essential to managing contractual risk effectively. Armed with this knowledge, real estate stakeholders can navigate disputes more efficiently and safeguard their interests in Sharjah’s evolving property market.

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