A guide to sub-leasing

Monday, August 4, 2014

Sub-leasing is allowed in Dubai, but should you do it?

It is not unusual for tenants to want to sub-lease their villa or apartment in Dubai, as there are often penalties payable for those who want to break their tenancy contracts early.

 

Sub-leasing in Dubai

 

It is important to explain what is meant by sub-leasing, as there are two different meanings. First, when an agency such as Better Homes obtains the master lease for an entire building and then sub-leases the apartments to tenants - each of the tenants has their own sub-lease contract with Better Homes. The second type, which this blog is concerned with, is when a tenant of wants to let their property to a third party.

 

What are the sub-leasing rules?

Sub-leasing is allowed in Dubai, in cases in which it has been agreed with the landlord, but anyone considering doing this needs to be aware of exactly what is permitted. Article 24 of Law 26 of 2007 decrees that unless it states otherwise in the tenancy agreement, the tenant must gain written permission from the landlord before sub-leasing the property. Article 8 states that the sub-tenancy must expire on the same date as the original tenancy contract. Article 25 states that failing to obtain written permission from a landlord prior to sub-leasing a property is grounds for eviction.

 

You may find that your landlord does not want you to sub-lease their property anyway because they are concerned that issues may arise with the sub-tenant. The landlord may not be sure that the sub-tenant is as reliable as the original tenant, and, the tenant themselves can still be liable for any damage caused to the property by the sub-tenant.

 

Consider short-term rentals in Dubai

You may be better advised to break the lease, assuming you can afford any penalties stipulated in the contract, or, ask the landlord if you can arrange for the transfer of the lease to a new tenant. Tenants who think they may not need to lease a property for a full year would be wise to ask the landlord for a contract that will permit sub-leasing before signing the contract. Another option is to consider using Better Homes’ short-term rentals division instead of entering into a lease which you know you may have to break.

 

I want to sub-lease from another tenant, what are my rights?

If a landlord does agree to the sub-lease, it is up to them to decide the type of sub-tenant they will allow in their property. If a legally agreed sub-lease is in place, the sub-tenant enjoys the same rights when it comes to tenancy renewal as the original tenant. This means that the landlord must give a notice period of 90 days prior to the end of the contract of any rent increase, and it must be in line with the rental increase calculator. In addition, the same eviction laws apply to sub-tenants as to original tenants, but again, only if they have a legally agreed sub-lease is in place. If they don’t have a legal sub-lease contract, the landlord can evict them immediately.

 



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