Breach of Contracts, Cheques, Holding of Employee Passports, Off-Plan Properties & more.

Host
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Host
Drive Live Talks Legal. Our guest today, as usual, is Ludmila Yamalova from Yamalova & Plewka. Ludmila, always lovely to see you. How are you?

Ludmila Yamalova
Good to be here, thank you. Weathering the heat slowly but surely.

Host
I feel like we’ve gone over the bump—the worst of it. It’s going to get better.

Ludmila Yamalova
I feel like I’m still on top of that bump.

Host
Well, that’s a whole different reason, Ludmila, and you’re at liberty to talk about that on the radio—or not—depending on if you want to.

Ludmila Yamalova
I prefer not.

Host
So, it is quite warm still. We’re all sort of, you know, getting there. But Ludmila, we always have lots to talk to you about. So, we have a couple of questions we had last week that we’re going to start with. Actually, this first one is anonymous.

It says, “I moved into a new apartment, and when signing the contract, we were told that a snag list of issues raised would be completed. Our contract states the landlord should give us a property in good standard. However, it wasn’t delivered that way.

We’ve waited three weeks to get the AC or chiller fixed, and integrated appliances including the washing machine, fridge, and freezer don’t work. The landlord is refusing to comply with the contract to fix them and is ignoring the tenants and the letting agent.

The letting agent says she’s going through a very difficult time personally and, due to this, she claims she didn’t read the contract fully when signing and won’t comply with all the details included in it. Fortunately, the letting agent carried out a full inventory beforehand, so the damage that was already done has been registered.

But there’s sort of an impasse. She won’t fix it, and she won’t comply with the contract. She has cashed the first check, but the letting agent has our second one. Where would we stand if we wanted to terminate the contract early?”

Ludmila Yamalova
As you can appreciate, this is a multifaceted question. It really comes down to the contract between the two parties—the landlord and the tenant—and the terms of that agreement.

For the purposes of this discussion, the snag list is the most relevant term of the contract. It seems there was a clear understanding between the parties about the issues that needed to be resolved before the contract could be fully honored. It’s good news that there was a snag list, but it’s unfortunate it wasn’t implemented before the tenant moved in.

This is actually a common issue in the UAE property market. As a general tip, it’s always better to avoid moving into a property until the snag list has been addressed. If you must move in before the snag list items are resolved, ensure there’s a clear timeline for the work to be completed and that the consequences of not meeting the timeline are specified in the agreement.

In this case, since the tenant has already moved in, and the landlord isn’t honoring the snag list for personal reasons, there are two main options:

First, you could consider terminating the contract early, claiming a breach of contract. If the snag list is a material term of the contract and the issues make it unbearable to live in the property—for example, if the AC isn’t working in this weather—you could terminate the agreement and request a refund of the rent paid.

However, recovering money from the landlord could be difficult, especially since they’ve already cashed six months’ rent.

The second option is to document everything thoroughly. Outline the agreed snag list and the landlord’s failure to comply. Provide the landlord with reasonable time to address the issues. If they don’t, you can arrange for the repairs yourself. Make sure you provide the landlord with reasonable quotes and the opportunity to choose contractors to avoid disputes later.

You can then offset the repair costs against future rent or the security deposit. If the landlord is reasonable, they should agree to this.

If the landlord continues to refuse to cooperate, you may need to escalate the matter to the Rent Dispute Settlement Centre (RDC) and file a case for compensation.

Host
They also mention that the letting agent still has their second check. Would it be plausible to get these things fixed and deduct the costs from that check, or could that be considered a breach of contract?

Ludmila Yamalova
Not necessarily. It depends on the landlord’s actions from now until the next rent installment is due. Under UAE contract law, if one party breaches the agreement first, the other party may have grounds to withhold performance of their obligations until the breach is corrected.

You could propose deducting the repair costs from the next rent payment and reissuing the check with the adjustments. However, letting agents often prefer to stay neutral and let the parties resolve disputes directly.

Host
Thank you, Ludmila. That’s a lot of valuable advice. Let’s take our next question.

Host
We have an anonymous caller on the line with a query about a villa rental situation. Good afternoon.

Caller
Hi, good afternoon. Thanks for taking my call.

Host
No problem. Do you want to give your question to Ludmila?

Caller
Sure. So, I’ve been living in the UAE for over six years, and this is the first time this has happened to me. I recently moved into a new villa using an agency. I signed a contract with a two-check rental agreement.

The first check was cashed with no issues. However, I noticed after six months that the second check hadn’t been deposited. I waited a couple more weeks, then the seventh month passed, and then the eighth. I got worried, so I contacted the agency.

The agency reached out to the landlord, and they informed me that the landlord had lost the check. I’ve looked at the contract, and I don’t see anything about lost checks, only penalties on my end for a bounced check. So, my question is: legally, what can I do in this situation?

Ludmila Yamalova
This is an interesting and excellent question, and it’s one we haven’t addressed before. Legally speaking, you’ve done nothing wrong. You’ve signed the contract and issued the checks, so you’re fully in compliance.

The landlord, however, must formally inform you of the issue—stating why they are requesting a replacement check—and ask you to provide a new one. You should not rely solely on representations made by the agency.

Here’s what you can do to protect yourself:

1. Obtain documentation. Ask the landlord or the agency to provide written confirmation that the check is lost. You shouldn’t take any action based on verbal assurances.
2. File a lost check report. The landlord must report the lost check to the police. The police will then issue an official statement confirming the check is lost.
3. Reissue the check with safeguards. Once you receive a copy of the police report, you can issue a replacement check. Keep all documentation to protect yourself from potential issues if the original check resurfaces.

If the landlord finds the original check later, they are legally obligated to destroy it or inform the police that it has been recovered. If, by chance, the original check is cashed, the police report will serve as evidence of your compliance, shielding you from liability.

Caller
Should I also inform my bank about this issue?

Ludmila Yamalova
Yes, it’s a good idea to provide your bank with a copy of the police report. While this won’t prevent the bank from processing the original check if it’s presented, it will ensure that you have documented the issue thoroughly.

Additionally, keep all original documentation for yourself in case you need it later, especially if you plan to leave the UAE in the future.

Caller
Thank you so much. That clears up my concerns. I’ll proceed with the landlord and request they file the police report.

Ludmila Yamalova
You’re welcome. You’re on the right track. Best of luck!

Host
Great question and an excellent resolution. Let’s move on to another query. Emma, do you have the next one?

Host
Yes, this one comes from a listener via SMS:

“I have a post-dated check issued by someone, but it bounced because the issuer had closed their account. I registered a case with the police, which was then transferred to CID. After months of back-and-forth with CID, I still haven’t made any progress. What should I do next?”

Ludmila Yamalova
The issue of bounced checks has become more nuanced since the introduction of the new law in the UAE. As of last year, checks below AED 200,000 are no longer punishable by jail sentences. However, this doesn’t mean there’s no recourse.

If the issuer of the check has closed their account, it’s still considered a financial obligation. Here’s how you can proceed:

1. Pursue criminal and civil routes. While the new law emphasizes penalties over jail time for checks under AED 200,000, you can still file a criminal complaint. Once you receive a judgment from the criminal court, it becomes valuable evidence for a civil case to recover your money.
2. File a civil case for recovery. Use the criminal court’s judgment to support your claim. The criminal judgment acts as prima facie evidence, significantly simplifying the civil case.
3. Account closure doesn’t absolve liability. Even if the account is closed, the individual remains personally liable for the check amount. If they have assets in the UAE, those can be used to satisfy the judgment.
4. Plan for contingencies. If the issuer has left the UAE, obtaining a judgment ensures you have legal standing to pursue action if they return or if assets are identified in the UAE.

Host
It seems like pursuing both criminal and civil routes is essential for resolution. What happens if the issuer has permanently left the UAE?

Ludmila Yamalova
Even if they’ve left, securing a judgment is worthwhile. Many people return to the UAE or maintain assets here. A judgment provides leverage should they re-enter the country.

Host
Thank you, Ludmila. That was helpful. Let’s take one final question.