A reader inquires about the legality of a real estate company retaining the entire payment without returning any portion of it.
Question: My cousin resides in Sharjah and has already paid the full year's rent for his apartment until November 10, 2023. If he decides to vacate the apartment earlier, will he lose the entire amount paid? Alternatively, can he pay a penalty and receive a refund for the remaining months? The real estate company refuses to return any portion of the payment, citing their policy as the reason.
Answer: In response to your question, the relevant regulations that apply to your cousin's situation are outlined in Execution Regulation 2 of 2010 of Sharjah Law No. 2 of 2007, which governs the landlord-tenant relationship in the Emirate of Sharjah.
In Sharjah, tenants are generally not allowed to terminate a rental agreement before its specified end date, unless circumstances beyond their control (force majeure) arise. If a tenant does decide to terminate the rental agreement early, they may be required to compensate the landlord with no less than 30% of the remaining rent amount, unless an alternative agreement has been reached with the landlord.
These provisions are in accordance with Article 22 (1) & (2) of the Executive Regulation 2 of 2010, which supplements the Sharjah Rent Law (Law No. 2 of 2007). The article states:
- In the case of a fixed-term lease, the tenant can request termination before its expiration if they can prove the occurrence of unexpected force majeure events that render continued occupancy impossible.
- If the committee overseeing the matter confirms the existence of force majeure events, the contract may be terminated, and the tenant will be required to compensate the landlord with an amount equal to or greater than 30% of the remaining rental fees for the lease period, unless both parties have agreed on a different arrangement.
Furthermore, if a tenancy contract is terminated early in Sharjah, the tenant may be eligible to receive any refundable amount from the landlord upon vacating the premises, or as determined by the Sharjah Rent Dispute Committee (RDC).
This is outlined in Article 22 (3) of the Executive Regulation 2 of 2010, which supplements the Sharjah Rent Law (Law No. 2 of 2007). The article states:
"In addition to the compensation mentioned in paragraph (1) above, the plaintiff (tenant) shall be entitled to the amount he paid as a security deposit for the leased premises, provided that he delivers the premises free of any liabilities on the date specified by the committee."
Based on this legal provision, it can be assumed that if your cousin's tenancy contract is terminated early due to circumstances beyond his control (force majeure), and the landlord refuses to terminate the contract and refund the prepaid rent for the remaining period, your cousin may choose to approach the Sharjah RDC and file a rent dispute case against the landlord.
News Source: Khaleej Times