Deception In Your Lease? Dubai's New Rule Could Annul Your Contract

(MENAFN- Khaleej Times) Dubai's Rental Disputes Center (RDC) has established new rules that allow tenants and landlords to annul lease agreements before signing in the case a contract can be proven deceptive.

The principle is grounded in the provisions of the Civil Transactions Law and confirms that legal safeguards may extend beyond the signing of a contract, provided the applicable legal requirements are met.

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RDC is the official authority which deals with rental disputes between landlords and tenants.

Stay up to date with the latest news. Follow KT on WhatsApp Channels. What does this mean?

The ruling would protect landlords and tenants' rights by ensuring transparency in rental transactions. This means that both landlords and tenants will have the right to annul their rental agreement if either party is found to have to withheld or provided misleading information.

Annulment is the legal process of declaring that a contract or agreement is officially not deemed valid.

Context to the ruling

The principle arose after a landlord discovered that the company they signed a lease agreement with were involved in previous rental claims stemming from failure to pay amounts due, the center said.

Before handing over the leased property, the landlord discovered that the company had been involved in previous rental claims and judgments arising from its failure to pay amounts due for properties it had rented for the purpose of subletting to third parties.

There were also several arrest and bring-in orders which had been issued against the company's manager in cases involving rental obligations, bounced cheques and delayed payments. The center did not mention the name of the company.

This prompted the landlord to seek annulment of the agreement before its
implementation began, out of concern that the tenant would fail to fulfil its contractual obligations.

After the claim was dismissed at first instance, the appeal was considered by the RDC's General Authority. Having examined the facts and determined their proper legal characterisation, the Authority concluded that the circumstances established in the case constituted deception under Articles 170, 171 and 173 of the Civil Transactions Law.

Accordingly, it ruled that the lease agreement must be annulled and the parties restored to the position they had been in before signing it. The ruling confirmed that annulment may be sought before implementation begins where deception is demonstrated and the applicable legal grounds are satisfied

Tenants and landlords can check if the other part has a history of rental-related judicial cases or judgements through RDC's Rental Good Conduct Certificate, found in the Dubai REST app.

This would allow them to assess whether to proceed with a proposed agreement before becoming bound by its terms. The service is also free of charge.

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