Navigating the real estate landscape in the UAE can be a complex journey, especially when purchasing a tenanted property. Many of our savvy clients are investing in property instead of renting, as the soaring rental market is pricing many existing tenants out of the area. For potential buyers, understanding the intricacies of legal notices and tenant rights is crucial to ensuring a smooth transition in property ownership. In this blog, we delve into the essential steps and legal frameworks buyers must consider when acquiring a property with an existing tenant. From evaluating the validity of eviction notices to integrating crucial clauses in the sale and purchase agreement, we offer a comprehensive guide to assist you in making informed decisions and securing your investment.
Currently there is no written law on this matter, and whilst tenants are reluctant to move, fighting that the previous notice was given for reason of sale, in some cases that were taken into the courts earlier this year had the new owner issuing notice to vacate for a further year for the reasons of wanting to move into the investment.
Recent cases have concluded that the notice to evict is attached to the physical property and isn't limited to the party that initially served it.
Join us as we unravel the legalities and best practices to empower your property acquisition journey in the UAE. What should the potential buyer do in this scenario?
We recently faced the same question for a client.
Question from a client...
Currently, I am buying a tenanted property with a legal notice service on July 17, 2023, which means the tenant should vacate on July 17, 2024. My question is, once the property is transferred to my name, will I need to serve a new legal notice to the tenant because I want to move in, or will the served eviction notice by the old landlord be transferable, which means the tenant still has to vacate by July 17.
In this scenario, the potential buyer (you) must understand the legal implications of the existing tenancy and notice period about the property transaction. Here are the steps you should consider:
- Review the current agreement and notice
Ensure that the existing eviction notice served by the current landlord is legally valid and by the local property and tenancy laws. The notice should clearly state the reason for the eviction, which is the owner’s intention to occupy the property.
- Consult with a Legal Expert
Before proceeding, consult with a lawyer or a legal expert who specialises in property law within the property’s jurisdiction. They can advise whether the existing eviction notice will remain valid once the property is transferred to your name or if a new notice needs to be served.
- Include a clause in the sale and purchase agreement
If the legal advice suggests that the existing eviction notice remains valid post-transfer, ensure this is clearly stated in the Sale and Purchase Agreement. Include a clause acknowledging the existing eviction notice and confirming its validity after the property is transferred to your name. This will ensure the tenant’s obligation to vacate by the specified date is legally binding under the new ownership.
- Notarise the Agreement
If necessary, have the relevant clause or agreement notarised at the notary public to add legal weight and clarity, ensuring that all parties involved know and agree to the tenancy and eviction notice terms.
- Communicate with the Tenant
Once the property is legally yours, communicate directly with the tenant to reiterate the terms of the eviction notice and your intention to occupy the property. Keeping open lines of communication can help prevent misunderstandings and potential legal disputes.
By taking these steps, you can ensure that the transition of property ownership does not affect the legal standing of the eviction notice and that you can move into the property as planned on July 17, 2024.
To help you with your investment journey, here are two templates: one to be included in the Memorandum of Understanding (MOU) between the buyer and seller and another as a notice for the tenant.
MOU Clause Template for Buyer and Seller
Clause on Tenancy and Eviction Notice Transfer
This Memorandum of Understanding (MOU), made on [Date], acknowledges the agreement between [Buyer’s Name] (“Buyer”) and [Seller’s Name] (“Seller”) regarding the property located at [Property Address].
Whereas the Seller has served a legal eviction notice to the current tenant, [Tenant’s Name], on [Date of Notice], requiring the tenant to vacate the property by [Eviction Date];
Whereas the Buyer intends to occupy the property as their primary residence upon transfer of ownership;
It is hereby agreed as follows:
- The buyer and seller confirm that the eviction notice served on [date of notice] fully complies with the applicable legal requirements and remains valid and enforceable.
- Upon completion of the property sale, the seller shall transfer all rights and obligations related to the current tenancy and eviction notice to the buyer.
- The buyer shall have the right to enforce the eviction notice without issuing a new notice, ensuring the tenant vacates the property on or before [eviction date].
- Both parties agree to cooperate fully to ensure the smooth transition of ownership and the enforcement of the eviction notice.
This clause is integral to the MOU and is legally binding upon both parties, their successors, and assigns.
Signed:
[Buyer’s Name]
[Seller’s Name]
Date: ___________________
Notice Template for Tenant
Eviction Notice Transfer Confirmation
[Date]
[Tenant’s Name] [Property Address]
Dear [Tenant’s Name],
Subject: Transfer of Ownership and Confirmation of Eviction Notice
This letter informs you that the ownership of the property located at [Property Address] is being transferred from [Seller’s Name] to [Buyer’s Name]. As part of this property transaction, we wish to confirm the continuation of the eviction notice dated [Date of Notice], which requires you to vacate the property by [Eviction Date].
Please be advised that the eviction notice remains valid and enforceable under the new ownership, and you are legally obligated to comply with the notice by vacating the property on or before [Eviction Date].
We appreciate your cooperation and expect the property to be vacated by the stipulated date to avoid any legal consequences. Should you have any questions or require clarification regarding this notice, please feel free to contact [Buyer’s Name or Buyer’s Legal Representative] at [Contact Information].
Thank you for your attention to this important matter.
Sincerely,
[Buyer’s Name] [New Property Owner]
[Contact Information]
These templates should be customized according to the specific details of the property transaction and legal advice received.
Understanding Eviction Notices
The transfer of eviction notices in Dubai isn’t clear-cut and can depend heavily on judicial discretion. But don’t worry, we’ve got strategies to help ensure that these notices are legally recognized and enforced.
Proactive Communication is Key
Start conversations early, ideally before the property transfer, to clarify eviction terms with the tenant, either directly or through your broker/seller. This proactive approach minimises legal misunderstandings and disputes.
Get Your Essential Templates
Need a Notice Template for Tenants or an MOU Clause Template? Access our carefully crafted documents to guide you through the process:
 | Tenant Notice Template: Download Here |
| MOU Clause Template: Download Here |
Customise these templates to fit your specific transaction needs and legal advice.
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