UAE Coronavirus: Lease considerations

The Novel Coronavirus (Covid-19) has disrupted the movement and operation of both individuals and businesses across the globe. The position of tenants, be it private individuals or commercial enterprises, may be particularly precarious given the economic difficulties that travel suspension and lockdown measures have had on the global economy. In response to this uncertainty, we wish to bring to your attention the available options that have been introduced across the UAE to assist tenants and landlords through this period.

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has announced various Directives in response to the Covid-19 outbreak. These Directives aim to assist UAE citizens and residents in overcoming the challenges caused by the pandemic.

In terms of the Directives, Deputy Ruler of Dubai and Chairman of the Dubai Judicial Council, His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum has suspended eviction judgments for residential and commercial facilities for the months of March and April as well as imprisonment judgments on all rental-related cases. Landlords are further encouraged to be flexible with tenants that may struggle to meet rental obligations over the coming months as a result of the Covid-19.

Early last week His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, ordered the stop of any rental eviction procedures including foreclosure on bank accounts, cars, bonds and real estate for two months.

Under the Directives, UAE Banking institutions have united in offering comprehensive relief packages to their customers to help ease the financial pressures in the economic environment caused by the Covid-19, which relief packages include various repayment holidays for personal loans, auto loans or mortgages under certain terms and conditions, which may assist landlords affected by tenants that are unable to make rental payments or vacate premises as per the above suspensions.

It is yet to be announced how the registration of Ejari(the Dubai central registry for all lease agreements) shall take place and whether the restrictions shall impact the renewal of existing contracts and moving of residential or commercial premises, however, in accordance with the UAE #stayhomecampaign, any non-essential movement by individuals may be subject to a fine.

Measures to assist tenants and landlordsmanage in these challenging times are announced daily as the government recognizes the importance of support of its citizens and residents. We, at Senat, are closely monitoring these developments and shall continue to keep you informed.

Senat MEA is a full service platform, founded in 2014, with roots in Dubai that go back as far as 1984. Dedicated to trust and efficiency, at Senat MEA we ensure that our clients are equipped with leading counsel in navigating the region while taking into account the global nature of business and the importance of developing long lasting relationships.

Senat MEA’s team of lawyers, accountants and business consultants are highly qualified and come from a variety of backgrounds enabling us to supply you with incomparable expertise and outstanding services.

This article is based on publicly available information and given for informational purposes only. It is not intended as legal advice or as a comprehensive analysis of the matters referred to herein.

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