Wael Deyab, Associate

The legal knowledge relating to real estate rent issues in Dubai is an important necessity that all landlords and tenants should be aware of. Especially when it is so easy for landlords and tenants to make mistake in concluding lease contracts. This article will focus particularly on the place of jurisdiction in the event of a dispute.

It is necessary to distinguish between the jurisdiction of the Dubai Rental Disputes Center (Center) by considering the disputes arising between landlords and tenants in the emirate or in the free zones and the jurisdiction of the Dubai International Financial Center (DIFC) courts with real estate located in the spatial scope of the DIFC, we clarify this as follows:

Article 1: Jurisdiction of the Rental Dispute Center:

The Rental Disputes Center in Dubai specializes in all rental disputes in all areas in the Emirate except for disputes within areas that have special committees or competent courts.

Article (3) of Law No. (26) of 2007 on regulating relationships between landlords and tenants in the Emirate of Dubai states that the law shall be applicable to leased properties in Dubai, including open and agricultural lands. This excludes hotels and free accommodation provided by natural or judicial persons to their employees.

Article (6) of Decree No. (26) of 2013 Concerning the Rental Disputes Centre in the Emirate of Dubai states that:

  1. The Centre will have the exclusive jurisdiction to:

1) Determine all Rent Disputes that arise between landlords and tenants of real property situated in Dubai or in free zones, including counterclaims arising therefrom, as well as determine applications for interim or urgent relief filed by any of the parties to a lease contract;

2) Determine appeals from the decisions and judgments that are subject to appeal in accordance with the provisions of this Decree and the regulations and resolutions issued in pursuance thereof; and

3) Enforce the decisions and judgments issued by the Centre in the Rent Disputes that fall within its jurisdiction.

  1. The Centre will have no jurisdiction to hear the following Rent Disputes:

1) Rent Disputes that arise within the free zones which have tribunals or special courts having jurisdiction to determine the Rent Disputes that arise within their boundaries;

2) Rent Disputes that arise from a lease finance contract; and

3) Disputes that arise from long-term lease contracts covered by the above mentioned.

The above mentioned points clarify that public order contravenes any agreement between the landlords and tenants on the jurisdiction of the DIFC courts to deal with rent disputes outside the scope of the DIFC.

Article 2: Jurisdiction of DIFC Courts:

The UAE legislator has exclusively defined in the Real Property Law the jurisdiction of the DIFC to hear all real estate disputes that are within the spatial scope of the DIFC. In other words, all real estate located within the spatial and geographical scope of the Dubai International Financial Centre shall have jurisdiction in that case exclusively to the courts of the DIFC.

Whereas, by reviewing the Real Estate Property Law No. 10 of 2018 of the DIFC, we find that the issue of jurisdiction has been resolved in respect of real estate matters within its scope by the articles stipulated in Part I under the title “General Provisions” as follows:

  •  Article (3) Application of this Law states that:

This Law applies to all Real Property within the jurisdiction of the DIFC.

  • Article (8) in regard to real property governed by this Law states that:

(1) From the date on which this Law comes into force, all Real Property from time to time within the Jurisdiction of the DIFC is governed by this Law.

(2) Real property within the jurisdiction of the DIFC includes:

(a) The Real Property referred to in Article 4(1); and

(b) Any Real Property later brought within the jurisdiction of the DIFC, by any method.

  • Article (11) concerning Interpretations, the second paragraph states that:

Unless the context indicates otherwise, a reference in this Law to Real Property is a reference to Real Property within the jurisdiction of the DIFC governed by this Law and which forms part of a plot of land for which a folio has been created under the provisions of this Law.

As a result of the foregoing, the jurisdiction in real estate issues is determined according to the spatial scope of the real estate and its geographical scope. If the lease is related to a property within the Emirate of Dubai and its free zones, then the jurisdiction belongs to the Dubai Rental Disputes Center. If the lease relates to a property within the spatial scope of the Dubai International Financial Center, then the jurisdiction is exclusively for the DIFC courts. In the event that a dispute arises, and the parties have agreed to be bound by a jurisdiction which is outside its scope, then such clause will be void. However, the rest of the agreement remains valid and the offended party may still file the dispute in the proper venue which has jurisdiction over the leased unit.