What to do when Security Deposit is not Refunded in United Arab Emirates(UAE)

BY: SANIA KAUSHIK (Legal Research Intern, The Law Reporters)

The United Arab Emirates has a robust rental market, where tenants frequently hunt for better tenancy agreements when their leases expire. While Ejari contracts have made landlords’ and tenants’ lives easier, recovering the complete security deposit in the UAE can be challenging at times. 
Tenants can obtain their security deposit back from the landlord when they change residences. This happens frequently and without issue. However, there may be deductions for which the tenant is unprepared.

The Rental Law in UAE
- If the landlord so desires (which is frequently the case), the tenant may be required to pay a security deposit at the commencement of the rental agreement.
- The security rent deposit is intended to cover end-of-lease repairs for wear and tear on the property while the tenant resided there.
- When the tenant vacates the property, the landlord must repay the security deposit in full or what’s left after deductions to the tenant.

Primary Instructions for Receiving Security Deposit Refund in the UAE

1. Read the tenancy contract well
As a general rule, the landlord is required to restore the entire security deposit to the tenant if the tenant vacates the premises in an acceptable condition as stipulated in the rental contract. As a result, it is critical to read the tenancy contract in the UAE attentively. The contract covers certain facts (if not all) relevant to rental security deposit claims, in addition to describing each party’s rights and duties.

2. Always get a ‘check-in’ and ‘check-out’ report
Check-in and check-out reports are other essential documents as parts of the tenancy contracts. Photographic documentation of the property’s condition before and after the tenant moves in and out is included in these reports. The landlord should perform these reports in the presence of the renter and with the proof in hand.

It’s a lot easier to spot any anomalies in the property’s condition, as well as the level of damage and wear and tear. In the UAE, if the wear and tear are minor, the tenant is entitled to a full reimbursement of their security deposit. If disagreements persist regarding the repayment of the security deposit cheque, the tenant should file a formal complaint with the Dubai Rental Dispute Centre (RDC) of the Real Estate Regulatory Agency (RERA). RDC is a judicial arm of the Dubai Land Department that employs flexible processes to resolve rental disputes in the Emirate and other real estate-related matters.

3. Know the Rental Law
The landlord ought to refund the security deposit to the tenant at the time of vacating the flat, in accordance with Article 20 of Law No. 26 of 2007 regulating the relationship between landlords and tenants in the Emirate of Dubai (the ‘Rental Law’). The law states, “When entering into a lease contract, the landlord may obtain from the tenant a security deposit to ensure maintenance of the real property upon the expiry of the lease contract, provided that the landlord undertakes to refund such deposit or remainder thereof to the tenant upon the expiry of the lease contract.”

Based on the provision mentioned above under the rental law of the UAE, tenants are entitled to a refund of the security deposit. One may approach the Dubai Rental Dispute Centre (RDC) to file a complaint against the landlord with all the applicable documents, including a security deposit receipt.

Online Dispute Resolution 
In the UAE, the whole dispute resolution process can now be done online on the Abu Dhabi Judicial Department website. The tenants could fill out the Rental Claim Form and attach the relevant documents, including a copy of the rental agreement. 
There would not be any hearing, and if the judge is convinced with the evidence put forward, he will issue a payment order within three days. The tenant can then notify the landlord of the payment order.
If the landlord refuses to return the deposit, the tenant can file a complaint online with the Judicial Department’s enforcement division. Before intervening, the landlord would be given 14 days to comply with the order.

Recourse available to the Tenant
In the UAE, the property market is controlled by RERA, a division of the Land Department. Tenants can file a formal complaint with the Dubai Rental Dispute Centre for a fee of 3.5 per cent of the annual rent of the property, at least Dh500 ($136) and not more than Dh20,000 ($5,445) including administrative costs of roughly Dh320 ($87). The Arbitration Department will attempt to resolve the case within 15 days, but a lawsuit will be required if that fails. A verdict is to be expected within 30 days.

Deposit Dispute Helplines
One may refer to the deposit dispute helplines for further assistance.
Rental Disputes Settlement Centre - 800 4488.
Rent Dispute Settlement Committee - 800 2353.

 

For any enquiries or information, contact info@thelawreporters.com or call us on +971 52 644 3004