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Increase in subletting in Dubai leads to crackdown

There has been a clampdown in the emirate as the number of people subletting has increased due to the economic downturn. Experts warn that people who pay rent to housemates for a room or to a landlord managing the property may be unknowingly subletting, and in breach of Dubai laws.
‘Most leases either prohibit subleasing entirely or state that no subleasing will be permitted without prior written consent of the owner, and in most cases, a letter of consent should be obtained,’ said Alexis Waller, a partner within Clyde & Co’s real estate division.

‘Most individuals subleasing are unaware of the law on this point. If taking a sublease, they should view the head lease and check that the original tenant has the right to sublease,’ Waller added.

Subleasing is a popular, flexible renting option in Dubai especially among expatriate workers. In addition to putting the burden of utility bills onto the lease holder, it avoids tenants needing to sign 12 month property contracts, allowing them to move freely between emirates and jobs. For landlords and owners, subletting can also be an efficient way to fill rooms and apartments in an oversupplied property market.

But the situation can be difficult for tenants who are unaware they are subletting illegally. They have no rights or protection if a home is reclaimed and can be evicted by the owners in a matter of days.
‘I have been renting my apartment for a year and a half under the impression that the owner knew we were renting from a man who acts as our landlord. The owner came around the other day and said we had to leave next month because he didn’t know the property was being sub let as he thought the landlord lived there. I never knew you needed a letter of consent, and now I have to find somewhere else to live,’ one expat told Arabian Business.

Lawyers say renters should also think carefully as to whether they are prepared to deal with someone who is not the owner of the property.

‘If the subletting is of part, for example, a room in a villa or apartment, where the original tenant also remains in the property, there can be further problems,’ said Nick Clayson, partner and head of real estate at Norton Rose in Dubai.

‘If the initial tenant leaves town, the other tenants will not have any direct rights against the landlord unless permission to sublet was contained in the initial lease. This can be further complicated if the initial tenant leaves owing money to the landlord,’ he added.