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Are eviction notices issued by previous landlords still valid following a transfer of property ownership?

To regulate a fair relationship between property owners and tenants in the Emirate of Dubai while preserving the rights of each party, Law No. 26 of 2007, as amended by Law No. 33 of 2008, specified exclusive cases in which the landlord is allowed to reclaim the leased property and terminate the lease relationship by evicting the tenant. 

The cases concerning the landlord's desire to terminate the lease at the end of its term includes various situations, with one of the most prominent being where the landlord wishes to sell the property. This occurs when paragraph (d) of item 2 of Article 25 of the law states the owner's right to evict the tenant "if the property owner wishes to sell the leased property." In this case, the owner must notify the tenant of this reason and request the eviction of the property at least twelve months from the date specified for eviction. This notification should be made through a notary or registered mail.

A question has arisen regarding whether, in the event that the landlord issues the notice regarding the termination of the lease and eviction of the tenant for the purpose of sale, the landlord must wait until the legally prescribed twelve-month period has elapsed then proceed with the sale? Separately, what will be the status of the previously issued eviction notice?

Recently, there have been many cases where the property owner issues a notice to the tenant, requesting eviction within 12 months due to their intention to sell the property. During this period, the property owner sells the property and transfers ownership to the new owner. Consequently, all the rights of the previous landlord under the lease transitions to the new owner in accordance with the law, and the new owner may request the tenant to comply with the notice sent by the previous owner for the termination of the lease and handover of the property post lapse of the 12 months period. However, the new owner may encounter resistance from the tenant, who may refuse to comply with the notice issued by the previous owner.

Legislatively, there is no explicit legal provision that grants the new owner of a leased property the right to benefit from the notice sent by the previous owner to terminate the lease and evict the tenant. This lack of clear legal guidance has led to many contentious cases in front of the judiciary due to the absence of a legal text addressing the issue. Consequently, judicial intervention has been necessary to establish a rule or principle that addresses this matter, taking into consideration the interests of all parties involved and preventing conflicting court rulings.

However, according to several judicial decisions, it has been established that the new owner of the property can indeed benefit from the notice sent by the previous owner requesting the termination of the lease and eviction of the tenant for the purpose of sale. This interpretation aligns with the evolving legal understanding of the matter within the context of rental disputes.

The establishment and adherence to this principle by the Rental Dispute Settlement Center's judiciary has been ratified to balance the interests of all parties involved while simultaneously preserving a healthy investment climate and preventing obstacles that could hinder market growth.

If the previous owner has followed the legal procedures by notifying the tenant, providing the tenant with the legally required eviction notice period, demonstrated their intent to sell the property, and indeed sold the property while still within the notification period, it would not be logical to deprive the new owner of their right to take possession of the property when they may have purchased it for personal use or other investment purposes. Furthermore, not allowing the new owner to benefit from the notice sent by the previous owner could result in harm to the new property owner, with the tenant benefiting at the expense of the owner. This would not achieve fairness between the parties and could have a negative impact on the healthy investment climate, potentially impeding market growth in the real estate sector.

We see that while the Rental Dispute Settlement Center's judiciary has established the principle of the current property owner's ability to benefit from the notice sent by the previous owner to the tenant requesting eviction for the purpose of sale, even though this legislative gap regarding the absence of a clear legal text has been addressed, the matter still requires legislative intervention to establish a definitive legal provision addressing the issue. Such a provision would have a positive impact on the real estate market, whether in terms of sales, purchases, or leasing, while also considering the tenant's interests and preventing the use of this as a means to evict the leased property.

To sum up, whilst there are no legislations in place to allow the new owner to evict the tenant on the basis on the notice served by the previous owner, legal precedent suggests rulings will tend to be made in favour of the owner. 

This article was written by litigation lawyers Asim Ahmed and Hassan Elagawani, and focuses on rental disputes in Dubai. 

BSA is a regional Law Firm in the Middle East with offices in the UAE, Oman and Saudi Arabia. As a full-service law firm our practice areas include litigation, arbitration and corporate services, including M&A, banking & finance, Intellectual Property, TMT, Fintech, employment and insurance.

Published on 5 October, 2023.

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