Dubai’s Rental Disputes Center (RDC) has established a legal principle allowing landlords and tenants to annul lease agreements before implementation begins if deception can be proven and the relevant legal requirements are met.
The principle is based on provisions of the UAE Civil Transactions Law and confirms that legal protection can apply even before a rental contract takes effect. It aims to strengthen transparency in property transactions and protect both parties from misleading information or the withholding of important facts.
The RDC is the official authority responsible for resolving rental disputes between landlords and tenants in Dubai.
The ruling followed a dispute in which a landlord sought to cancel a lease agreement after discovering information about the prospective tenant company’s rental history. According to the RDC, the company had previously faced rental claims and court judgments linked to its failure to pay amounts owed for properties it had leased for subletting to third parties.
The landlord also discovered that several arrest and bring-in orders had been issued against the company’s manager in cases involving rental obligations, bounced cheques and delayed payments. The RDC did not disclose the company’s name.
Concerned that the tenant might fail to meet its contractual obligations, the landlord sought annulment before the property was handed over and the agreement began to be implemented.
The claim was initially dismissed. However, the case was subsequently considered on appeal by the RDC’s General Authority, which examined the circumstances and their legal implications.
The authority determined that the facts established in the case amounted to deception under Articles 170, 171 and 173 of the Civil Transactions Law. It ruled that the lease agreement should be annulled, restoring both parties to the position they had occupied before signing the contract.
The decision confirms that a party may seek annulment before implementation begins when deception is demonstrated and the applicable legal conditions are satisfied. It also reinforces the importance of providing accurate information during rental negotiations.
The RDC has advised landlords and tenants to check the rental-related legal history of the other party before committing to an agreement. They can use the Rental Good Conduct Certificate service available through the Dubai REST application to review relevant judicial cases and judgments.
The service is free of charge and allows prospective parties to assess potential risks before entering into a lease.
The ruling highlights the importance of due diligence in Dubai’s rental market, where checking relevant records and ensuring transparency can help parties make informed decisions before becoming bound by contractual terms.
