Further to last month's article in respect of Qatar's new Lease Law, please note that Council of Ministers' Decision No (9) of 2008 Setting Controls, Duration and Percentages for Rental Increases (the "Rent Control Decision") has now been passed, stated to be effective from 15 February 2008.
Under the Rent Control Decision:
Leases entered into on/after 1 January 2005 may not have their rental value increased until 15 February 2010 unless the contract provides otherwise;
Leases entered into before 1 January 2005 may only have their rental value increased according to the percentages set out in the Decision.
Being:Rent amount per month Permitted annual percentage increase
Less than QAR 2,000 20%
QAR 2,000 to QAR 5,000 15%
QAR 5,001 to QAR 10,000 10%
More than QAR 10,000 5%
Summary of Key Issues of Rent Control and Rent Renewal
Rent Control
The 2008 Lease Law provides that rent increases will be as per a Council of Ministers Decision.
Under the Rent Control Decision:
(i)Leases entered into on/after 1 January 2005 may not have their rental value increased until 15 February 2010 unless the contract provides otherwise;
(ii) Leases entered into before 1 January 2005 may only have their rental value increased according to the percentages set out in the Decision.
Lease Renewal
The 2008 Lease Law sets out instances when the Landlord may terminate the lease agreement early;
Otherwise...
A lease agreement will expire at the end of its fixed term. However, if the Tenant remains in the property with the Landlord's knowledge and the Landlord does not raise an objection then the lease agreement is deemed renewed for the same period and according to the same terms;
However...
If the Tenant is still using the premises, any lease agreement entered into prior to 15 February 2008 is automatically deemed to be extended for two years (ie to end on 14 February 2010), unless the contract stipulates a longer duration, or the Tenant does not wish to renew the lease agreement.
By Katrina Wilson, Property Department, Qatar
© Al Tamimi & Company 2008
