Q

Is financial penalty fair for terminating a contract?

We rented an apartment for one of our staff members in the International City. The landlord refused to reduce the rent ahead of the contract renewal, so I sent a vacating notice three months before the expiry date, which was accepted by the landlord. Just a week before the tenant was due to move out, the landlord agreed to our price so we asked him to send us a new tenancy contract for the rent. Unfortunately, the staff member then had to leave so we did not need the apartment anymore. We sent an email (a week after the expiry of the current lease) informing the landlord that we would not renew and that we would hand over the key and the access card. Now he is refusing to accept the handover saying we have overstayed by a week (which is true ) and that we cannot just vacate the property without paying a one-month penalty. What needs to be done if the handover is refused? RP, Dubai

AThe first question to ask is what does the contract say about penalties? The other point is that the landlord believed the tenant would stay on, so I question why you would inform him that this was not the case after one week had lapsed? The landlord does have a point.

You should have checked with the tenant before agreeing to a new contract. Now the landlord is faced with finding a new tenant quickly to mitigate his void period, so he is demanding compensation.

I suggest that the penalty of one month rent is a small price to pay given that, in reality, one week was still “under contract”. For your case, I believe this has been an expensive lesson but one that I’m sure you have now learnt, so will not repeat.

QI signed a tenancy contract last month for a studio apartment in Silicon Oasis. The tenancy contract states that the tenant has to pay for:

1. Any maintenance above Dh500

2. Chilled water (when I checked this with building management, they said the building was chiller free and that no meters were present)

Also the apartment is meant to be handed over to me very soon but until now, the agent has not organised the Ejari. Please advise what should I do? RG, Dubai

AFirstly, when it comes to maintenance, the norm is for the tenant to pay for any repairs or services needed under Dh500 and anything above this figure ought to be the responsibility of the landlord. For some reason, your contract is the other way round, so I would definitely change this.

The second point about the tenant paying for chilled water would normally mean the consumption of AC in the apartment. If this building is chiller free and no meter is present you cannot possibly pay for the chiller. This is then the responsibility of the landlord as it will form part of the maintenance charges.

If the tenancy agreement also started on a certain date and you have not moved in yet, I suggest you either get a refund for the days that the apartment has not been given to you or the contract is altered to reflect the date that it will be handed over to you. Mario Volpi is the chief sales officer for Kensington Exclusive Properties and has worked in the property industry for over 30 years in London and Dubai The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to mario.volpi@kensington.ae

The landlord, faced with finding a new tenant quickly to mitigate his void period, is demanding compensation