Dubai Tribunal Overturns Rent Ruling After Recognising Payments Made Through Authorised Intermediary

A Dubai rental dispute tribunal has overturned an earlier judgment ordering a tenant to pay Dh51,667 in alleged arrears, after finding that rent and related charges had been validly paid through an authorised intermediary managing the property.

The Dubai Rental Dispute Settlement Centre ruled that the tenant had acted in good faith when transferring rental payments to parties who appeared to have authority to manage the residential unit, and that no outstanding dues were payable to the landlord.

The dispute arose over a residential apartment in Dubai, where the landlord claimed that the tenant owed rent arrears along with a security deposit, administrative expenses and other charges totalling Dh51,667.

The tenant maintained that the rent had been paid in full at the start of the tenancy via bank transfer, based on instructions provided by individuals involved in managing the property. To support her defence, she submitted documentary evidence including bank transfer receipts amounting to Dh45,675, email and WhatsApp correspondence confirming payment instructions, Ejari tenancy registration records, proof of utility deposit payments, and a clearance certificate from the Dubai Electricity and Water Authority confirming no outstanding utility dues.

She also demonstrated that she had vacated the property before the end of the lease term and had settled all obligations in accordance with the instructions provided during the tenancy.

Despite this, the rental committee initially ruled in favour of the landlord and ordered the tenant to pay the claimed amount along with court fees and related expenses, before expert findings were fully considered in the proceedings.

Following the ruling, the tenant, represented by UAE-based legal consultancy Kaden Boriss, filed a petition for reconsideration after the standard appeal period had lapsed.

Reconsideration is an exceptional legal remedy under UAE procedural law, permitted only in narrowly defined circumstances, including cases involving fraud, forged documents, newly discovered material evidence, internal contradictions in a judgment, or where a party was not properly represented due to serious procedural irregularities. It is not intended to operate as a second appeal, but as a safeguard to ensure justice where critical facts were not previously examined.

In its submission, the Kaden Boriss legal team argued that expert findings fundamentally altered the basis of the original ruling, particularly in confirming that rental payments had been made and that certain amounts claimed by the landlord were not contractually due from the tenant.

The expert report further clarified that the tenant had dealt exclusively with a property management entity throughout the tenancy. This intermediary had prepared the lease agreement, issued payment instructions, collected rent, and handled all administrative aspects of the property relationship.

During the reconsideration proceedings, the landlord confirmed that the management company had drafted the tenancy contract, received rent payments, and provided the executed agreement, while acknowledging that there had been no direct dealings with the tenant.

In its final ruling, the tribunal placed significant weight on the expert findings and confirmed the existence of an intermediary acting between the parties throughout the tenancy. It found that the tenant had consistently followed instructions issued by entities that appeared, through conduct and documentation, to be authorised to act on behalf of the landlord.

The tribunal applied the legal doctrine of apparent authority, under which a third party acting in good faith is protected where another party, through representation or conduct, creates the impression that an agent is authorised to act on its behalf. The court held that the tenant had reasonably relied on such appearances when making payments and managing tenancy obligations.

The tribunal also noted that the landlord had not raised objections regarding rent payments for most of the tenancy period and only challenged the payments shortly before initiating legal proceedings. This delay, it said, undermined the claim that the payments had been improperly made.

Further, the return of the security deposit to the tenant was considered an additional indication that the tenancy account had been settled and no outstanding liabilities remained.

On that basis, the tribunal cancelled its earlier judgment in full and dismissed the landlord’s claim, concluding that the tenant’s payments were legally valid and that no further sums were due.

The decision highlights the importance of clearly defined payment channels and documented authorisation in tenancy arrangements, particularly where property management companies act as intermediaries between landlords and tenants.

Legal experts note that the ruling reinforces the principle that tenants acting in good faith should not be penalised for relying on apparent authority created by landlords or their agents.

It also underscores the evidentiary burden on claimants in rental disputes, particularly where long-standing payment practices and intermediary arrangements are involved.

For tenants, the case serves as a reminder to maintain comprehensive records of all payments, communications, and tenancy-related documentation, including Ejari registration and utility clearances.

For landlords, it highlights the need to clearly specify authorised agents for rent collection, monitor payment flows closely, and raise timely objections if discrepancies arise during the tenancy period.

 

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