Dubai’s Rental Disputes Centre has established a new judicial principle allowing landlords and tenants to cancel signed rental contracts before the tenancy begins if they can prove they were misled during the agreement process. Announced on October 30, the ruling emphasizes that signing a rental contract does not necessarily make it final and binding under all circumstances.
The decision came in response to a dispute involving a landlord who sought to annul a lease agreement upon discovering that the prospective tenant company had a history of unpaid rent, multiple court cases, and legal actions against its manager, including arrest and bring-in orders related to bounced cheques and delayed payments. Concerned about the company’s ability to fulfil the lease obligations, the landlord initially approached the Rental Disputes Centre to cancel the contract prior to the start of the tenancy. Although the request was initially denied, it was later reconsidered on appeal.
After reviewing the evidence, the General Authority of Dubai’s Rental Disputes Centre determined that the landlord had been deceived, invoking provisions of the UAE’s Civil Transactions Law. The Authority ruled to annul the lease agreement and ordered that both parties be restored to their positions before signing the contract.
The Rental Disputes Centre highlighted that this ruling does not permit either landlords or tenants to unilaterally withdraw from rental agreements simply due to a change of mind. Rather, there must be clear evidence of deception and fulfillment of applicable legal conditions in order to seek cancellation.
Judge Abdulqader Mousa Mahmood, Chairman of Dubai’s Rental Disputes Centre, reiterated the Centre’s dedication to safeguarding the rights of both landlords and tenants and ensuring fairness in rental transactions. The Centre also urged residents to verify the rental history of prospective tenants or landlords before entering into agreements. It offers a free Rental Good Conduct Certificate service, which allows parties to check if the other has been involved in previous rental-related legal cases or judgments.
This ruling introduces a legal safeguard that extends beyond contract signing, providing added protection against fraudulent or misleading practices in Dubai’s rental market.
