Tim Elliott
Okay, three, two, one. Welcome to Lawgical the UAE’s first and still the only regular legal podcast. My name’s Tim Elliott. I’m here with our expert, the managing partner of the Dubai-based legal firm, HPL, Yamalova and Plewka Here is Ludmila Yamalova. Good to talk to you.
Ludmila Yamalova
Good to see you too, Tim.
Tim Elliott
This episode, weather, which is going to make me very comfortable as an English person. It’s what I know how to discuss. But last week’s unprecedented storm, we’re using that word again, led to the most rainfall in a day in this region since records began 75 years ago. Now, in some areas, over 250 millimetres was recorded, less than 24 hours. So that, of course, led to flooding.
Cars had to be abandoned. Really, really tough times, Ludmila for so many homeowners, tenants and car owners, of course. You are okay though, aren’t you?
Ludmila Yamalova
Thankfully, yes, I am okay. And ironically enough, I live on the artificial island, the Palm Island, that is perhaps by some account would be one of the wettest spots in Dubai. And ironically enough, I think the Palm perhaps fared the best of so many other communities in Dubai. So we apart from just some minor trees, or I guess not so much minor, but some trees toppling and
and temporary flooding on the main roads. There are no major incidents, no major casualties. So we are thankfully counting my blessings. Under the circumstances, we made it out just fine.
Tim Elliott
It’s not been like that for lots of people. I just moved house from one of the badly affected communities. I was very fortunate as well, but we still spent the day mopping water and trying to keep water at bay. There are so many sides to this, Ludmila So let’s talk about property damage caused by the storm and the floods that ensued. And in this podcast, the rights that we have as tenants.
Ludmila Yamalova
Yes, indeed. So the rights of tenants under these circumstances really kind of depend on a number of things. One is the extent of the damage and the type of damage and the specific circumstances surrounding their properties or communities.
And in general, for some tenants, for example, the damage concerns primarily their personal belongings or items within the property, such as furniture, carpets, art, and other assets inside the building, inside the property. For other tenants, it could be that plus the damage to the property itself. For example, leaky windows or collapsed ceilings.
Tim Elliott
Yeah.
Ludmila Yamalova
and plugged up drains and ruined floors and floorings, be it hardwood floors or tiles, and so on and so forth. So there’s in addition to the damage to the personal belongings, there’s also damage to the property. And yet for other tenants, in most cases, they would have suffered both of those damage to specific
personal belongings and also to the property itself. And additionally, we’re forced to move out either temporarily during that week of floods and rains because the property was ultimately unlivable or uninhabitable. And in some people’s cases still to this day, they may not be able to return to the properties because for example, they have a collapsed ceiling or a blown window altogether. So that basically the what
tenants can do or should do from here on really depends on which one of those unfortunate situations they might have found themselves in.
Tim Elliott
With regard to tenants’ personal belongings, what are their options?
Ludmila Yamalova
Well, with regards to the personal belongings, as a general rule, that’s responsibility of the tenants. So, irrespective of what cause potentially the damage that would have led to the damage to the personal belongings of the tenant, anything related to the tenant’s own possessions or properties is their responsibility. And in fact, most of the lease agreements in the UAE, at least that I’ve seen, or at least many of the leases in the UAE, even have a specific provision.
where the tenants, the obligation is specifically stated, the personal belonging is specifically imposed on the tenant. One, and two, in many cases, especially in the perhaps in the more recent leases I’m talking about a few years back now, there’s a specific provision that requires the tenant to actually get their own insurance to cover their personal belongings.
I even had a case back in perhaps like 12 years ago where there was a collapsed ceiling or a blown pipe and the tenant was trying to bring a claim against the landlord, including for the person belonging. So even back then, there was a provision in the lease that anything within the property of the tenant, it’s their specific responsibility. That’s from 12 years ago. So now you can imagine many more leases.
these days include that provision and perhaps even more robust, ultimately imposing the responsibility on the tenant to have their own insurance. And in some cases I’ve even seen where it’s even drafted that kind of responsibility as an obligation and that is the obligation of the tenancy that the tenant must have their own insurance.
Tim Elliott
Talk me through contents insurance or tenants insurance, because it’s not something that too many people really bother with in the UAE is it?
Ludmila Yamalova
Indeed. Well, so at a high level, content insurance is also referred to as tenants insurance or renters insurance. And it’s a type of insurance policy that’s designed to protect individuals who rent their living space versus own. For example, it could be an apartment, it could be a house, but ultimately it’s specific insurance that applies to rental relationship and that
rights and assets within the property related to their tenancy agreement.
Tim Elliott
What kinds of things does content insurance usually, and I use that word under advisement, what does it usually cover?
Ludmila Yamalova
So at a very high level again, in general terms, content insurance typically covers three things, kind of the big things. One is the personal property coverage. The other one is additional living expenses coverage. And then there’s a liability coverage. So with regards to the first category, that’s called the personal property coverage. So this aspect of the insurance policy provides coverage for the tenant’s personal belongings against covered…
incidents such as a flood, fire, theft, and other kinds of natural disasters. And then in this case, personal property that would be covered by this particular clause or the particular insurance would include furniture, clothing, electronics, appliances, carpets, art, and other items that are owned by the tenant.
So that’s the personal property coverage aspect of the tenant’s insurance. The other one is the additional living expenses. Usually that’s the rent. So if the event when the rental property becomes uninhabitable or unlivable due to a covered loss, so for example, if a flood is covered by insurance and that event happens, so because of that the property becomes uninhabitable.
So then the renter’s insurance can provide coverage for additional living expenses incurred while temporarily living elsewhere, such as, for example, hotel bills or extra food costs and other types of alternative accommodation. So that’s what’s called additional living expenses coverage, part of the insurance. And then also, most of these content insurance also include what’s called the liability coverage.
So, renter’s insurance also typically include that particular aspect, which protects the policy holder or the tenant in this case against claims or lawsuits for bodily injury or property damage caused by their renter or their household members, right? So, for example, the tenant…
had some guests at the time. And as a result, or even when the guests drove their car and had perhaps some expensive items on them during the event. And those items or that person were also injured or damaged. So that’s the liability coverage would also extend to that third party. And so among other things, this particular coverage can help pay for, for example, for legal fees, medical expenses. And
and any kind of damages that are awarded in the lawsuit. And so that’s kind of these are the three different aspects of that more or less, if you will, like a typical content insurance policy. And generally speaking, these renters insurances are usually quite affordable and offer a very valuable protection for tenants’ belongings and the liability exposures.
Tim Elliott
The interesting thing is that I’ve alluded to this just now, it’s just not an insurance that has taken off here in the UAE. Not that many people have ever taken insurance like this.
Ludmila Yamalova (
Indeed, you are correct. And if you recall, we have been doing this podcast for many years together. And if my memory serves me right, a few years back, we covered similar issues. And back then, we talked about content insurance, I think we might even have a specific podcast on just content insurance. And so as part of that discussion, we highlighted the importance of taking content insurance, especially
given the uncertainties, challenges of bringing a court case in the UAE. And so when you have insurance, in many cases, if it’s a proper insurance, then it will substitute for the efforts that you might otherwise have to pursue against that party through the courts. So instead of going to court, you could just claim coverage from the insurance. And so in many cases, it’s just a simpler, more streamlined.
way for you to get your rights covered. And so we discussed this content insurance back then and just for the avoidance of doubt and for disclosure, I have nothing to do with the insurance industry. I have no partnerships with any insurance providers and I’m strictly speaking here as a legal practitioner and a lawyer. And it’s from that perspective that I do encourage tenants to consider taking content insurance once again.
But as you rightfully said, despite that, my hour warnings years ago, and despite the number of tenants or rented properties that exists in the UAE, which by the way is not necessarily the case everywhere else in the world. For example, in the US, it is very common for people to actually want to own property. And so there’s perhaps there are even some places where there’s…
more owned properties than tenanted. But in the UAE, I don’t know the percentages, but there is a lot of properties that are being rented versus owned. And despite that, there are still very few cases where actually tenants take or consider taking insurance. And it’s even more surprising because, as I mentioned earlier, these are not very expensive insurance policies.
So the cost is fairly affordable and accessible. And by the way, there’s plenty of insurance providers that have this kind of policy of different types and different coverage and different costs. And yet it is not very popular and not very common.
Tim Elliott
It really isn’t. It’s always a surprise. Let’s talk about damage to a property as a tenant. Who’s responsible for fixing damage such as the damage caused by the storm last week?
Ludmila Yamalova
Yeah, so damage to real property, which basically means in the context, as a tenant, you may have a leaky window or a leaky ceiling or a collapsed ceiling. You could have ruined tiles or hardwood floors. You may have collapsed walls and flooded driveway.
basement and so on and so forth. So that’s basically, that’s what we’re talking about, damage to the property. So it’s more structural to the property, anything from the walls and ceiling outward. And so, generally speaking, damage to real property caused by, is response, or first of all, property and the obligation to maintain the property is attached to the right of ownership.
And so therefore the damage to real property caused by, for example, rain or any other external factors is the responsibility of the owner of the property. In other words, it’s the responsibility of the landlord and not the tenant. And this is because such damage does relate to the property itself, whose obligations, but also benefits such as rent, for example, right, or the value of capital appreciation are attached to the right of property ownership.
So for example, in a case where let’s say a ceiling collapses from the excess of rain, it is the obligation of the owner of the property to fix the ceiling, even though that at that point in time, the property was tenanted and it was being enjoyed, if you will, by the tenant and not the owners of the property.
Tim Elliott
Sorry, glitch there for a second. Can you hear me okay? You can. So what happens if a landlord who is responsible, that much is clear. What if a landlord says, no, I’m not gonna fix the damage, you have to do it?
Ludmila Yamalova
Yes.
Yeah, well, and that’s perhaps to be expected. And we’ve seen many cases like this, even outside of this kind of a calamity, if you will, the recent calamity. So in the event that the landlord refuses to fix the damage in the property, tenants can pay for the repairs themselves and then bring a case against the landlord for reimbursement. And this, by the way, is well established under the UAE laws and practice. In other words, let’s say that you’re one of those tenants where you’re sealing.
came down and you’ve reached out to the landlord asking them to repair and the landlord just refuses to repair, but you cannot live that way for waiting for the landlord to come forward and yet your whole family lives in the property. So what would you do? Right? And so ultimately you may want to make a decision to repair it at your own cost. So that option is always there as long as you have in writing.
sufficient evidence to show that you have given the landlord a notice and then B, time to respond and fix, and then they refused. And so you’ve notified them for the avoidance of caution, notified that you will be retaining your own contractors to take care of the problem. And then whatever expenses you will have incurred, you will then seek reimbursement from the landlord. So that perhaps is what I would recommend for all those.
tenants who find themselves in this situation. And under the circumstance, we can imagine the extent of the damage would have been significant. One, and two, we’re going into the summer months. So whatever damage might have happened to the property, you want to fix soon before the heat really sets in. And in many people’s cases, for example, the windows have been blown or maybe even their AC units broken. So in those cases where the landlords don’t want to repair.
and that’s what tenants should do. They should just call in their own contract, document it thoroughly, and incur the expense, and then file a complaint with RDC for reimbursement.
Tim Elliott
Okay, so what about tenants whose enjoyment of the properties being compromised in the meantime because of, you know, the damage?
Ludmila Yamalova
Yes, so in general, depending on the circumstances, tenants may have a claim against landlords for, for example, reduction in value of accommodation. So if, for example, as a result of the damage, you can only benefit from part of the house, like half of the house. Let’s say you had to relocate your whole family into one room because the rest of the premises are unusable. So that what would be the best solution.
classify as the reduction in value of the benefit or enjoyment of the property. So, that’s basically, that’s one type of, I guess, compensation you can seek from the landlord is to compensate you sort of proportionally for the reduction in value accommodation. Let’s say in simple terms, if you can only use half of your property for however long.
then you can pay 50% for that period of time. So that’s kind of in legal terms, one of the claims that you could bring against the landlord in the event you don’t have the full value of what you contracted for. So that’s in the event that you still have the benefit of the property, but only part of it.
But then, in some cases, where you either had to move out for a period or still have to live out because the property is unusable, then once again, depending on how long you had to be out and what expenses you incurred as a result of this, of having to seek alternative accommodation, temporary accommodation, you can also bring a case against the landlord for compensation
for those additional expenses associated with alternative accommodation.
Tim Elliott
What about in cases where it gets to, I guess, the next stage, you just can’t use what was your home and you’ve had to seek alternative accommodation?
Ludmila Yamalova
Yes, so in those cases, I guess there’s two options. One option is to break the contract, or so to speak, break the contract, is to end your lease and move out and live elsewhere, and then seek reimbursement from the landlord for the remainder of the lease. So that’s one option. The other option is to…
basically a request for the landlord to come and fix the property because you don’t want to move out because you have too much invested. In the meantime, you’d be living in alternative accommodation and then notify the landlord that you wish for that alternative accommodation to be compensated while the property is being fixed. So, there’s different…
there’s different scenarios, there’s different options, and there’s also different chances of success, if you will, in the event you decide to file a court case, because the landlord is either not cooperating in terms of fixing the property or not cooperating in terms of compensating or reversing you for your expenses. And so in terms of how the courts would look at it, there’s different ways that I anticipate the different types of arguments.
that might arise. So for example, there could be some cases where tenants had previously notified the landlord that certain parts of the property were defective and therefore if those defects were not fixed in time, that the damage in the event there was some kind of some event such as, for example, the recent storm would happen, that could lead to more significant damage. And the landlord, for example, ignored those claims.
So that’s a claim for negligence by the tenant, where the tenant can argue that the reason or the extent of the damage was due to the landlord’s negligence or fault. And so you can see, so in that case, the extent of the tenants’ compensation by the courts could be greater.
if the tenant can show that much of the damage, the additional damage perhaps, was due to the landlord’s neglect or default. So that’s perhaps one scenario. But there could also be a scenario where, where technically speaking, the landlord had nothing to do with it. It wasn’t the landlord’s fault. There were no issues that had been raised to the landlord previously. And
The landlord did not default on any requests because there were no such requests. In other words, but the property suffered significant damage. So in that case, for example, the landlord would argue, listen, it’s construction defect. It’s not my fault that the builder built that unit or that villa the way they did for so much water to penetrate the premises. But even in those cases,
the damage still concerns the property itself, its responsibility of the owner of the property. So with regards to how the judges would look at it, the courts would look at it in terms of tenants’ claim for compensation, they may view this as a mitigating factor in terms of the actual value of compensation that they would award the tenant. So in other words, if the tenant
makes a claim for 500,000 dirhams and can show that had perhaps landlord fixed some of the issues that the tenant had communicated early, maybe the damage would have been only half. So in that case, you can see how in Dubai would be the RADC would agree with the tenant’s position. But equally so, if the same sort of similar amount of claim of 500,000 was brought under circumstances of construction defect,
maybe the courts would be a little more involved in terms of deciding how to pare down the amount of compensation. And they would do this by appointing an expert and maybe even engineering construction expert to determine the fault.
Tim Elliott
I mean, claiming is one thing, but it’s realizing the claim, i.e. getting the money back that’s the problem, and asking landlords to pay. Don’t landlords have an excuse?
Ludmila Yamalova
Well, yes, that’s a very good question. And I’m sure all those landlords who are listening to this are also wondering the same, and if anything, they probably feel even more harmed because they actually have quite a bit of value and actual money or cash invested in the property. And not only their property has perhaps potentially losing value, but additionally.
they now need to spend money on actually fixing the property. And now, in addition to that, they’re also dealing with potentially non-payment or rent and challenges by the tenant for reduced use or value of their properties. So it’s sort of like a triple whammy, if you will. So landlords may feel quite frustrated and feel wronged even by having to actually have to compensate tenants.
these circumstances. And so the argument they can assert is that this was an event of force majeure. And so the recent storm in the UAE and the corresponding floods could have been deemed as an event of force majeure and therefore excluding or excusing landlords from performing their obligations.
Tim Elliott
Force majeure is a term we hear a lot. It’s included in I guess most insurance contracts, but let’s just get the The real legal definition. What is it?
Ludmila Yamalova
Well, at a high level, force majeure, it’s a legal concept that refers to unforeseeable circumstances that prevent the party from performing its side of the obligation. And therefore giving that party a legitimate excuse to not perform their side of the bargain. And so non-performance in this particular case could be, let’s say, the reduction in the value of the property or the benefit that the tenants would…
would otherwise derive from the property. So let’s say if the property is only half the property is usable now, so the other half is unusable. So the tenant would argue, well, as a landlord, you’re obligated to give me 100% of the property and 100% of the property has to be usable and livable, but now I only have half of it. So you’re a landlord, you’re gonna be breached because you’re only giving me half of what I contracted for.
So in these cases, landlords may argue that the latest storm was in fact a natural disaster and as such beyond their control and therefore that’s a cause of, that’s an event of force majeure that gives them a legitimate excuse to just say, well that’s not my fault, I had nothing to do with this, I could not have controlled it, therefore my non-performance is excused and I don’t have to compensate you for.
for breach of contract because the breach is not my doing. Now it remains to be seen how the UEE courts will classify this particular event and whether this argument of force majeure would actually be upheld.
Tim Elliott
What advice, Ludmila, do you have for tenants looking forward to the future?
Ludmila Yamalova
Well, number one is consider taking content insurance, content or tenants insurance, or renters insurance. There’s different terminology for it, but more or less it means one the same. So, but as we discussed, it’s an insurance policy that exists in the UAE, and there are many different insurance providers that offer this policy. It is fairly accessible and affordable.
And it does, and it can cover or offer fairly broad coverage, anything from damage to your personal belongings, to alternative accommodation or temporary accommodation, to even third-party liability coverage. So the options are there, and I would highly recommend the tenants. And obviously, as you rightfully said, this was an unprecedented event.
first one in 75 years apparently. So, I mean, can we expect another event like this? No, and we don’t want to be counting on it. But given the… But the other kind of eventualities or circumstances that happen often where tenants may find themselves in similar situations, let’s say fire or flood from even like an apartment upstairs, right? It may not even be your doing, but it could be your neighbors that have caused issues to your unit. So…
Under the circumstances, content insurance is highly advisable. It’s affordable and certainly would make your life a lot easier. And it’s a great insurance plan, which as the name suggests, and that gives you a peace of mind and most importantly, a recourse in the most difficult situations, such as flood or fire, for example. So I would highly recommend that tenants go back to the drawing board.
Do some research and identify some policy providers and research and make sure that they understand what’s included in the policy. That’s also important because often tenants just or not tenants, just parties who take insurance they just sign documents with closed eyes or rely simply on the representations of the brokers or agents. So make sure if you are going to take a policy, make sure that you understand the terms and the coverage.
the copy of the full coverage on you because ironically enough, bizarrely enough, very often we see people that take insurance, pay for insurance coverage, and yet all they have is just basically a receipt of payment and not the terms and conditions of the insurance. So I highly recommend that if you are going to take insurance as a tenant, which you should, before you
part with your money that you not only read what’s included in there, but also make sure that you have a copy of the policy and all the specific terms and conditions that include the coverage and exclusions before you pay.
Tim Elliott
You know, it’s hard to overstate the importance of something like this. And as you say, contents insurance really isn’t an expensive insurance. I have a friend many years ago, financial advisor, who said to me, do you know what, Tim, we were talking about insurance. It’s a total waste of money insurance. And I was kind of taken aback. And then he said, until you need it.
and that really kind of hit home with me. It kind of backs up what you’ve been saying. Final thoughts, anything else to add?
Ludmila Yamalova
Yeah, well, two things. One is all those who perhaps are listening to this podcast, just manage your expectations and be prepared that landlords will be asserting force majeure as a defense. So consider your claim and your arguments and evidence in that context because it will be a serious claim. And until we see
courts issuing decisions on this, we won’t really know which way the sort of the wind will blow, but certainly it is, you know, it’s legitimate and it’s a strong defence. So kind of manage your expectations and manage your approach, keeping that in mind. That’s one. And two, an interesting thought I had as we were talking is that depending on where you
assets you might own in your home country or in other countries. You might have, because by the way, in other countries you actually having either homeowners insurance or tenants insurance is actually a lot more common. So for example, if you have a home in the US, you would have homeowners insurance. And a lot of the homeowners policies in the US also cover your personal belongings.
on you or your value, irrespective of where those personal belongings are. So for example, if you lose something that’s valuable to you, let’s say a wedding ring or a bracelet, so a lot of the times those insurance policies will actually cover your loss of that particular asset, irrespective of where that asset is. So in many cases, obviously when you take that insurance…
You there’s options to include other specific items and it depends on the specific policy But I tell you because I know firsthand that a lot of the homeowners policies in the u.s. Do actually cover Your personal belongings in general within your home Which means that in many cases those people who might not have had home insurance here or renters insurance here Might actually be able to benefit from their insurance. Let’s say in the u.s
to have, if not all, at least part of their personal belongings covered by that insurance abroad.
Tim Elliott
So read the fine print is the advice. That’s logical. This time, weather, the rights, the options that we have as tenants with regard to any property damage caused by the recent storm here in the UAE. As ever, thanks for listening, watching, if you’re with us on YouTube. And thanks as always to our legal expert, managing partner here at Yamalova and Plewka Ludmila Yamalova thank you.
Ludmila Yamalova
Thank you, Tim. As always, pleasure to be speaking with you.
Tim Elliott
Find us at L.Y. Law, social media, Facebook, Instagram, TikTok, LinkedIn. All the podcasts that we do are free at lylawyers.com as well. And if you’d like a legal question answered in an episode of Lawgical or to talk to a qualified UAE experience legal professional, click on contact at lylawyers.com.
Okay, that’s very good.
Ludmila Yamalova
Right? Yeah, so I was just this. Yeah, I just sort of this morning also I
Tim Elliott
Yeah.
