Dubai RDC allows lease annulment where deception is proven

Dubai, UAE - In a ruling that reinforces the protection of landlords’ and tenants’ rights and promotes transparency in rental transactions, Dubai’s Rental Disputes Center (RDC) has established a judicial principle allowing a lease agreement to be annulled before its execution begins where deception in the contracting process is proven. The principle is grounded in the provisions of the Civil Transactions Law and confirms that legal safeguards may extend beyond the signing of a contract, provided the applicable legal requirements are met.

The principle arose following a claim filed by a landlord who had signed a lease agreement with a company. Before handing over the leased property, the landlord discovered that the company had been involved in previous rental claims and judgments arising from its failure to pay amounts due for properties it had rented for the purpose of subletting to third parties. It also emerged 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.

These findings prompted the landlord to seek annulment of the agreement before its implementation began, out of concern that the tenant would fail to fulfil its contractual obligations.

After the claim was dismissed at first instance, the appeal was considered by the RDC’s General Authority. Having examined the facts and determined their proper legal characterisation, the Authority concluded that the circumstances established in the case constituted deception under Articles 170, 171 and 173 of the Civil Transactions Law. Accordingly, it ruled that the lease agreement must be annulled and the parties restored to the position they had been in before signing it. The ruling confirmed that annulment may be sought before implementation begins where deception is demonstrated and the applicable legal grounds are satisfied.

In this regard, His Excellency Judge Abdulqader Mousa Mohammed, Chairman of the Rental Disputes Center, reaffirmed the RDC’s commitment to fostering a balanced and fair rental environment grounded in justice and the upholding of the rights of all parties to rental relationships. He explained that such judicial principles help clarify the scope of legal protection available to landlords and tenants.

He also highlighted the importance of reviewing the Rental Good Conduct Certificate before entering into a lease agreement. The certificate provides information on the parties’ rental litigation records, helping them make informed decisions before signing contracts, mitigate potential risks and support the stability of Dubai’s rental sector.

The Rental Good Conduct Certificate is one of the RDC’s digital services, enabling prospective landlords and tenants to check whether the other party has a history of rental-related judicial cases or judgments. This information allows them to assess whether to proceed with a proposed agreement before becoming bound by its terms. It’s provided free of charge as part of the RDC’s efforts to raise legal awareness and strengthen confidence in Dubai’s rental market.