The landlord
and tenant relationship, as well as the negotiating positions of either, can
often be tested by external factors, with the current pandemic being a prime
example. It’s the best time to consult property
lawyers in Dubai.
The measures executed to diminish the spread of COVID-19 virus have plunged the
real estate sector into uncharted waters. Rentals have been impacted by the
closure of restaurants, shops, bars, and other public establishments.
Commercial properties are no exception due to the 'work from home' initiatives
and curfews implemented.
Tenants are
going through significant changes in their job and salary status. As a result,
landlords are being bombarded by requests and demands on rent relaxations,
waivers, and discounts. This leads to questions like, ‘Do landlords have to
postpone or decrease rental payments due to COVID-19?’. Considering the
setbacks in business or employment, 'Can tenants terminate tenancy contracts
immediately without penalty?' There are
key legal considerations when it comes to amending lease arrangements. Any real estate lawyer in Dubai will point out these policies:
Can tenants
apply force majeure to excuse them from paying rent?
Tenants can
refer to their lease for a force majeure clause. It stands for the proposition
that the tenant’s obligations to pay rent under the contract can be excused
when a “force majeure” makes such liability impossible, impracticable, or
illegal. Force majeure is often thought of as an ‘act of God’, a natural
occurrence like an earthquake or hurricane, or a particular circumstance beyond
reasonable control.
If this
clause exists in the lease, both parties will have to review the precise
wording to understand whether the pandemic falls within the contractual
definition. Only then can it excuse the non-payment of rent. In the absence of
a force majeure clause, both parties might have to consider invoking a
statutory provision. The UAE Civil Code provides various articles that deal
with force majeure and unforeseen events, including Article 273, 294, and 782.
...continue reading
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