Dubai rental authority sets new rule to annul leases proven deceptive before signing

Dubai’s Rental Disputes Center (RDC) has established a new legal principle that allows tenants and landlords to annul lease agreements before they take effect, provided the contract can be shown to have been based on deception.

The rule, grounded in provisions of the Civil Transactions Law, confirms that legal safeguards may extend beyond the signing of a contract when the applicable legal requirements are met, the RDC said.

What the ruling means

The decision aims to protect the rights of both landlords and tenants by enforcing transparency in rental transactions. Under the new principle, either party may seek to annul a rental agreement if the other side withheld or provided misleading information.

Annulment is the legal process of declaring a contract officially not valid.

Case that prompted the ruling

The principle arose after a landlord discovered that the company they had signed a lease agreement with had been involved in previous rental claims and judgments arising from failure to pay amounts due, the RDC said.

Before handing over the property, the landlord learned that the company had been subject to earlier rental claims and court orders for non-payment of rent on properties it had rented for subletting to third parties. Several arrest and bring-in orders had also been issued against the company’s manager in cases involving rental obligations, bounced cheques and delayed payments. The centre did not name the company.

The landlord sought to annul the agreement before implementation began, out of concern that the tenant would fail to meet its contractual obligations.

After the claim was dismissed at first instance, the appeal was heard by the RDC’s General Authority. Examining the facts and their legal characterisation, the Authority concluded that the circumstances constituted deception under Articles 170, 171 and 173 of the Civil Transactions Law.

It therefore ruled that the lease agreement must be annulled and the parties restored to the position they had been in before signing. The ruling confirmed that annulment may be sought before implementation begins where deception is proved and the applicable legal grounds are satisfied.

How to check a party’s history

Tenants and landlords can verify whether the other party has a history of rental-related judicial cases or judgments through the RDC’s Rental Good Conduct Certificate, available on the Dubai REST app. The service is free of charge and allows users to assess whether to proceed with a proposed agreement before becoming bound by its terms.