Got landlord-tenant related questions? - Ask the agent

On Ask the agentSanket Khanna, CEP and Founder, SNS Properties

Question of the Week

I am a tenant in a property which was transferred from the old owner to the new owner by court order. I signed the contract with the old owner and paid him the deposit. I wish not to renew and asked the new owner to refund me, but he said to claim it from the old owner. Who is responsible to pay me?

The obligation to refund the deposit should be attached to the new owner. Generally, upon transfer of the property, all liabilities attached to it are also transferred. The property obligations (deposit) are transferred to the new owner in the same way as the property’s benefits (rent) are transferred.

Any issues between the new and old owners must be resolved between them. The tenant’s rights and obligations are attached to the owner of the property at the relevant time. If at the time of claiming the deposit the property belongs to the new landlord, that landlord should be obligated to fulfill it.

The best option for the tenant is to file a case against the new owner. If the new owner believes the claim should be filed against the old owner, he can bring him into the lawsuit.

Another alternative is for the tenant to file a case against both owners. It will then be up to the parties to argue who should be responsible for the deposit.

My tenant’s cheques have bounced, and he has left the country. What should I do?
First, the landlord must inspect the apartment to see whether it is being sublet. Subletting without the landlord’s approval is illegal. Next, he must file a bounced cheque case with the police who will give the tenant a 30-day notice to make him or herself known. If he does not do so, the police may enter the unit. The landlord must go with the police to keep a record of the contents.

It is vital to follow this process as the landlord needs to de-register the tenant from the utility providers and district cooling which requires police reports.

After filing a report with the police, it is advisable to file a case with the Rent Committee to terminate the tenancy contract and to enter a contract with a new tenant. The landlord must serve a notice with a notary public giving the tenant 30 days to rectify the breach in contract. 

How can buyers ensure that they are not cheated mainly in cases where the seller is being represented by someone with a power of attorney?
There are ways for buyers to ensure that they are not cheated in cases where the seller is represented by a POA. One, confirm that the POA is valid and applicable to the transaction. Two, request for the original contracts. Three, request to have direct contact with the owner by e-mail, postal address and phone. Four, ask for copies of the seller’s passport. Five, do thorough due diligence on the seller’s representative by asking for passport and visa copies, address, trade license, Emirates ID/labor card. Six, register the transaction with the Land Department. Seven, make all payments directly to the owner. Eight, do due diligence on the property itself. Nine, pay the bulk of the purchase price during transfer not earlier. Ten, have the detailed terms of the arrangement documented in an agreement.

Can property investors in one emirate file a case against a developer in another emirate?
Yes, under certain circumstances, property investors in one emirate can file a legal case against a developer in a different emirate. They can do so in the following scenarios:

One, the underlying sales contract was signed in the emirate where the investor wants to bring a lawsuit. So, for example, an investor in a property in Abu Dhabi who signed the contract for that property in Dubai can bring a suit in Dubai on the basis of the place of the signing of the contract. This applies even if the developer is based exclusively in Abu Dhabi.

Two, the developer has an office or physical presence in the emirate where the investor wants to file the suit, even if it involves the property in another emirate. Thus, an investor in a property in Ajman who invested with a developer located in Dubai can also file a legal action against that developer in Dubai on the basis of the developer’s business residence.

I live in a rented villa. Upon speaking to my friends and neighbors, I realize some are assessed housing fees in their utility bills and some are not. Why this variance? What can I do about it?
Housing fees are levied by the Dubai Municipality (DM). They are collected by DEWA and appear on the bill. Housing fees apply only to expatriates and calculated as five percent of the annual rent for leased properties. For properties occupied by owners, the fee is five percent of the annual rent as per the RERA rental index. If the occupier believes the fee is not based on the accurate value, he should approach DM to have his account updated. For tenants, they should present a copy of the lease agreement. For owners, they should present the updated RERA rental index.

Collection of housing fees is not yet consistent across Dubai. As of April 2012, according to DM representatives, Dubai authorities were collecting fees from 17 out of possible 27 zones across the emirate. Thus, the inconsistency in housing fees is due to DM and DEWA still updating their records.

Source: Sanket Khanna, CEO and Founder, SNS Properties

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