Feb 28 2008
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Qatar's new lease law
Qatar has recently overhauled the law in respect of landlord and tenants by introducing a new Lease Law No (4) of 2008 (the "2008 Lease Law"), which replaces the previous Lease Law No (2) of 1975 (as amended) (the "1975 Lease Law").
The 2008 Lease Law provides for the following that were not in the 1975 Lease Law1:
It is stated to be effective from 15 February 2008.
It has widened the applicability of the Law (or removed any ambiguity in such respect) by making it clear that it applies to "furnished units the renting period of which exceeds one month"2.
This should ensure that fanciful interpretations of the Law and not put forward to try and circumvent it by making accommodation "furnished" by adding air conditioners and a table or two are arguing non application of the relevant laws - as many landlords and their lawyers attempted under the 1975 Lease Law/Rent Control Law No (4) of 2006 (the "Rent Control Law").
Additionally, it makes clear that the 2008 Lease Law applies to "housing, commercial or industrial purposes, or for any other purposes but so did the 1975 Law, unless the lease was otherwise exempt. Two (new) exemptions made clear are in respect of "industrial area" (which ties in with Ministerial Resolution Establishing and Organising Industrial Areas) and "hotel and tourist apartments and units" (the latter commonly being accepted as an exclusion under the wording contained in Article (1)5 of the 1975 Lease Law, in any event).
All lease agreements (those existing on 15 February 2008 within one year hence and those entered into after that date) between landlords and tenants should be registered by the landlord at a new Office for Registration of Lease Contracts at the Ministry of Municipal Affairs and Agriculture (the "Ministry").
It sets out certain terms that must be included in all lease agreements.
As to the requirement for the landlord to hand over the premises in a fit condition to fulfill the purposes of the lease agreement; if the landlord fails, then the tenant may not only terminate the contract but under the 2008 Lease Law may stay in the property and only pay a reduced rent if the Committee so decides.
The landlord is bound to carry out maintenance work of the leased premises. If it/he fails to do so the tenant may approach the Committee for permission to carry out the maintenance him/itself and the costs be deducted from the rent payable.
As to urgent maintenance by the landlord required to preserve the property, the tenant may not object to such but if it causes complete or partial inter ference with the tenant's enjoyment of the property he may - within 30 days of the maintenance commencing - request termination, reduction in the rent payable or an extension of the lease duration.
In respect of lease agreements for housing (only), the deposit given to the landlord as security may not exceed two months' rent. Otherwise, it will be in accordance with the contractual terms agreed between the landlord and tenant.
No changes may be made to the property without first having the landlord's written approval. Under the 1975 Lease Law this was only required in respect of "major or apparent" changes. As was the case previously, in any event, if such approval is not given then the landlord may request that the property is returned to its original state and/or request compensation if applicable.
The tenant is responsible for payments in respect of water, electricity and phone services to the lease property for the duration of the lease, unless otherwise agreed.
The landlord may not request any increase in the rent value of any existing or new lease agreement except in accordance with a Council of Ministers' Decision.
This attempts to deal with the fact that the Rent Control Law, in force for two years, recently expired.
"As an exception to the provisions of Article (15) [dealing with expiry of leases, which provides that "the lease contract shall expire when the contract's prescribed duration expires. In case the duration expires while the Lessee is still in benefiting from the leased property, while the Landlord is informed and does not raise an objection, the lease contract shall be deemed renewed for the same period and according to the same terms"], lease agreements existing on the date of enforcing this Law shall be extended by two years, starting 15 February 2008, and ending on 14 February 2010, unless the contract stipulates a longer duration, or the Tenant does not wish to renew the contract, provided the Tenant is occupying the lease property."
It makes it clear that rent must be paid within seven days from its due date. In instances where the landlord refuses to accept the rent, (and the proper procedure is followed) the tenant can pay the money to the Committee (previously it was paid to the Court). The tenant (only) must inform the landlord of such.
A new owner of property already leased must within thirty days of acquiring the property notify the tenant and the Lease Properties Contract Registration Office of such (enclosing a copy of the title deed).
Article (17) clarifies the position upon death the tenant as regards his family already living in the property.
The Committee may adjudicate transference in instances of a provision in a lease agreement prohibiting the selling of a commercial lease. This is to deal with situations where there is an asset (as opposed to share) sale of a company and the lease agreement forms part of the assets being sold. If there is a prohibition on transfer of such a lease then the Committee may overrule that "provided that a sufficient guarantee is presented to prove [the purchaser's] ability to settle the obligations resulting from the lease agreement, and provided that he purchaser shall not inflict any definite damage against the Landlord".
The instances when a landlord may terminate the lease before its expiry have been tightened up in certain respects in comparison to what was previously allowed under the 1975 Lease Law and/or the Rent Control Law:
All such (early) evacuation requires consent of the Committee;
Where evacuation is because the landlord wishes to demolish the property (other than in instances where the tenant's safety is at risk) then this is only possible either where the building has been constructed more than fifteen years ago and/or it is for the establishment of new investment or commercial buildings (provided the necessary approvals are obtained from the competent authorities);
"If the Landlord wishes to elevate, extend or amend the property, considering the following:
a. Inability to per form any elevation, extinction or amendment while the Tenant is still occupying the lease property, according to the evaluation of the authority granting the licence.
b. The Landlord obtaining all necessary permits and licences from competent authorities.
c. Granting the Tenant a time limit to evacuate the property not less than six months after the Landlord obtains necessary permits and licences.
d. The Landlord starting to execute licensed works within six months from the evacuation date.
In case the Landlord does not per form the licensed works, or leases the rented property to another Tenant before per forming such works, the [original] Tenant may request compensation adjudication, in case of exigency."
If evacuation is owing to the lease property being within the landlord's private residence, and he requires it for dependent family members, then the tenant must be given at least six months' notice to evacuate.
The Ministry will establish the Office for Registration of Lease Contracts, which will keep a register of all lease contracts (as referred to above).
The Ministry will establish at least one Leasing Dispute Settlement Committee, with judicial powers to quickly resolve disputes between landlords and tenants, within three months - which is hoped to make enforcement of the protection afforded to tenants easier and quicker. Decisions of the Committee shall have the force of an execution document, in accordance with the Civil and Commercial Procedure Law.
It should be noted that cases currently being heard by the Courts will remain there. Decisions of the Committee may be appealed within fifteen days to Qatar's Court of Appeal.
It has clarified the position that the section dealing with leasing in the Civil Code will also apply in respect of issues not stipulated in the 2008 Lease Law - unless they are contrary to the latter (which will prevail).
By Katrina Wilson Property Department, Qatar
© Al Tamimi & Company 2008
© Copyright Zawya. All Rights Reserved.
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