Understanding Early Termination of Rental Agreements in Sharjah, UAE

Renting a property comes with its own set of responsibilities and commitments. Sometimes, tenants may need to terminate their lease before its expiration date. In this blog post, we will explore the implications of early termination for tenants in Sharjah, UAE. We'll address a common query regarding the refund of prepaid rent and shed light on the legal provisions governing such situations.

Question: The Dilemma of Early Termination Imagine this scenario: Your cousin resides in Sharjah and has already paid the full-year rent for his apartment. However, due to unforeseen circumstances, he wishes to vacate the property before the lease period ends. The question arises: Will he lose the entire amount paid upfront? Is there a possibility of receiving a refund for the remaining months by paying a penalty? Unfortunately, the real estate company refuses to consider any reimbursement, citing their policy. Let's delve into the legal framework to find the answers.

Legal Provisions:

In Sharjah, the relationship between landlords and tenants is governed by Execution Regulation 2 of 2010, derived from Sharjah Law No. 2 of 2007. These regulations outline the rights and obligations of both parties and shed light on early termination scenarios.

Termination Restrictions:

Under normal circumstances, a tenant cannot terminate a rental agreement before its expiration date unless specific uncontrollable circumstances, such as force majeure events, arise. This provision aims to maintain the stability of rental agreements and protect the interests of landlords.

Compensation for Early Termination: If a tenant plans to terminate the lease prematurely, they may be obligated to compensate the landlord. Article 22 (1) & (2) of the Executive Regulation 2 of 2010 of Sharjah Rent Law stipulates that the tenant should pay a penalty amounting to at least 30% of the remaining rent. However, it's essential to note that this penalty can be subject to negotiation and agreement between the tenant and the landlord.

Refundable Amount:

In case of early termination, tenants may receive a refund for the remaining months. Article 22 (3) of the Executive Regulation 2 of 2010 of Sharjah Rent Law, clarifies that the tenant must vacate the premises and pay the compensation mentioned in paragraph (1) before receiving any post-dated cheques or advance rentals. The Sharjah Rent Dispute Committee (RDC) determines the specific refundable amount.

Taking Action:

If your cousin's real estate company refuses to cooperate and refuses to terminate the contract or refund the prepaid rent for the remaining period, there is recourse available. Your cousin can file a rent dispute case against the landlord at the Sharjah RDC. It's important to demonstrate that the early termination request results from circumstances beyond the tenant's control, qualifying as force majeure.

Navigating early termination of a rental agreement can be complex, but understanding the legal provisions can empower tenants to make informed decisions. In Sharjah, UAE, tenants should be aware of the compensation requirements for early termination, the possibility of receiving refunds, and the option to escalate disputes to the Sharjah Rent Dispute Committee. By knowing their rights and seeking appropriate legal guidance, tenants can mitigate potential losses and ensure a fair resolution