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We are excited to share the latest edition of the Law Update, beautifully and appropriately titled “Sustainable Horizons: The Saudi Arabian Vision.” Giving special honor to the Kingdom’s 2030 vision, this update focuses on a collection of both informative and inspiring articles.
For those in construction, you can learn about how the tendering environment impacts risk-pricing for contractors, the updates on the legal framework of the construction industry and how contractors can protect themselves against financial difficulties.
There is good news too from the kingdom’s banking sector, from which the practice of “Open Banking” is being pushed for! But what is open banking? We’re answering that too.
Also . . . Are there any women trail blazers in Saudi Arabia you can name? We’ll help you with that. We cover how the Middle East has been making strides in empowering women in the entrepreneurial space,most notably in STEM fields.Read the full edition
David Bowman - Senior Counsel - Real Estate
Abu Dhabi Law No. (20) of 2006 (the “Landlord and Tenant Law”) as amended by Laws No. (6) of 2009 and No. (4) of 2010 (“Law No. (4)”) and Executive Council Resolutions No. (56) of 2010 and No. (25) of 2011 (“Resolution No. (25)”) regulates most landlord and tenant relationships in the Emirate of Abu Dhabi except those relating to:
The Landlord and Tenant Law allows the parties to a lease to fix the rent by agreement in the lease. Where the rent is not fixed, the landlord currently has the right to an annual rent increment. This right is currently subject to a maximum increase of 5% of the existing rental amount (the “Rent Cap”). The Rent Cap may be increased, reduced or cancelled from time to time by the Chairman of the Executive Council as he considers appropriate. A tenant may refer the matter to the Abu Dhabi Rent Committee for determination of the rent where a landlord exceeds the Rent Cap.
The term of a lease will remain in force until its expiry and may be renewed upon the mutual consent of both parties. Should a tenant remain in occupation upon expiry of a lease with the knowledge and consent of his landlord, then the lease shall be deemed to have been renewed for a similar term on the same terms and conditions. Should either party not wish to renew a lease, then at least 2 months’ (for residential property) or 3 months’ (for commercial property) prior written notice must be given to the other party.
The most significant change to the Landlord and Tenant Law introduced by Law No. (4) relates to renewal of leases upon their expiry and changes to the determination of rent payable under renewal leases. Under the current law, a landlord may not request that a tenant vacates a property upon expiry of his lease. Once Law No. (4) has been fully implemented a landlord will be entitled to request that a tenant vacates a property on expiry of his lease and may refuse the renewal of the lease, subject to requirement for necessary notice provisions to be observed. Therefore whilst Rent Caps will continue to apply during the lease terms there will be no protection for tenants against rent increases upon lease renewals. The deadline for full implementation set by Law No. (4) was originally 9 November 2010, however this has subsequently been extended twice and currently expires on 9 November 2012 (Resolution No 25 of 2011). The Executive Council has the power to further delay this date.
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