A recent judgment by the Rental Dispute Settlement Centre (RDC) of the Dubai Land Department has upheld that the dismissal of an employee (also the tenant and Plaintiff in this case) from his job qualifies as an “Exceptional Circumstances” event and therefore, justifies the termination of his lease contact with his landlord (the Defendant).

The RDC confirmed in its judgment that a lease contract may be terminated in two cases, either by applying the principle of “force majeure” or the application of the theory of “Emergency Circumstances” which cannot be prevented or expected at the time of contracting. This is a significant finding as the termination of employment is deemed to meet the criteria for “Exceptional Circumstances” events as per UAE law and is ultimately considered grounds for the termination of the lease contract with no penalty for early termination being imposed on the tenant.

The RDC in its judgment stated the following:

“The RDC is of the view that the termination of the Claimant is an event of emergency circumstances, which the Claimant cannot mitigate nor predict. The lease has become burdensome to the tenant to the extent that it is impossible to continue with the lease agreement.”

We are happy to support you with your real estate and rental disputes and litigation matters. For further information, please reach out to one of the contacts below or your usual Baker McKenzie contact.


Author

Dr. Habib Al Mulla is the Executive Chairman of Baker McKenzie Habib Al Mulla and the Head of the Dispute Resolution practice in the UAE. He is one of the UAE’s most highly respected legal authorities with over 34 years’ experience in UAE law and has drafted many of the modern legislative structures in place in Dubai today. Dr. Habib focuses his practice on litigation and arbitration. He is Chairman of the CIArb (Chartered Institute of Arbitrators) UAE Committee and most recently served as Chairman of the board of trustees for the Dubai International Arbitration Centre (DIAC).

Author

Wael El Tounsy is the Head of the Real Estate Dispute Resolution practice at Baker McKenzie Habib Al Mulla, based in Dubai. He has practiced law in the Middle East for over 30 years with a focus on real estate and construction litigation, including in relation to property investment and development, sale and purchase agreements and specialist commercial real estate. His experience extends to arbitration-related court proceedings, criminal litigation matters and maritime disputes.

Author

Marina Gaballah is an associate in Baker McKenzie Habib Al Mulla's Dispute Resolution Practice Group, based in Dubai, with a focus on real estate, construction and civil and commercial litigation matters. She has been involved in various complex disputes that were reviewed before the courts and other judicial entities, such as the Rental Committee in Dubai and the Dispute Resolution Centre in Dubai.

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