Two real estate companies are ruling out any rental cut currently

Tenants in Abu Dhabi demand a collective solution to the leases of commercial warehouses

Tenants: Reducing warehouse rental values ​​ensures project continuity and increases the ability to renew lease contracts.


Tenants of commercial warehouses demanded to reduce the rental values ​​of warehouses they rented, pointing to the intransigence of real estate companies and their complete refusal to reduce rental values, despite the fact that commercial activity has been severely affected, and business revenues have declined significantly, due to the Coronavirus (Covid-19) pandemic, calling through “ Emirates Today »to a collective solution temporarily, especially with the rejection of many of the rental companies the idea of ​​reducing rental values.

They also indicated that they face problems related to the maintenance of those warehouses, and that they incur additional financial costs in the maintenance item.

In turn, two real estate companies have ruled out any reduction in warehouse rental values ​​at present.

They indicated grace periods for tenants of more than three months, in the context of showing solidarity and full understanding between the two sides: the lessee and the lessor, at a time when one of the two leasing companies made it clear that reducing rental values ​​violates their responsibilities and may lead to legal problems.

Tenants intransigent

In detail, the citizen tenant, Mohammed Abdullah, who is the owner of a commercial company supported by the "Khalifa Fund for Enterprise Development" and the "Mohammed Bin Rashid Establishment for Small and Medium Enterprises Development", said that tenants are currently suffering the intransigence of real estate companies, and their complete refusal to reduce the rental values ​​of the commercial leased warehouses. One of them is, despite the fact that business activity has been severely affected, and revenues have declined significantly due to the Coronavirus (COVID-19) pandemic.

He explained that a warehouse-owner company rejected a collective request signed by a number of tenants to reduce rental values ​​by up to 50% from the period from March 1, 2020 to the end of December 2020, due to the repercussions of the pandemic.

He added that the tenants assured the owner company that the reduction in rental values ​​guarantees the continuity of projects, the stability of business, and increases their ability to renew their lease contracts in the future.

He pointed out that the tenants face difficult conditions, most notably the absence of an approved company for maintenance work in the warehouse area, which has caused severe damage and risks to the tenants' work, and pushed some of them to carry out maintenance work at their own expense, which made them additional financial burdens.

Grace period

For his part, the tenant, Alaa Faraj, said that he rented three commercial warehouses from real estate companies in Abu Dhabi, more than a year ago, but he has not been able to start his commercial activity so far, given the repercussions of the pandemic conditions that led to the delay in preparing the warehouses.

He confirmed that he had asked the real estate company to reduce the rental values ​​of warehouses, due to his inability to pay under emergency circumstances, but the company refused to make any reduction, and informed him that the maximum that it can offer is to give him a grace period of two months, after which he pays the full value.

Faraj believed that this procedure is not sufficient and did not solve the problem, especially since the main issue is the payment of the rental value and not just postponement, considering that circumstances will not change during this short period.

Faraj pointed out that the company that owns the warehouses also does not show any cooperation in supporting maintenance operations, despite the existence of defects in the warehouses that led to water leakage, and the tenants incur additional costs.

General problem

In the same context, the tenant, Mohamed Samir, confirmed that he was not able to pay the full rental value of the warehouse he rented, given that the commercial activity was severely affected, especially with the closure period, last year, and the reduction of the capacity of many activities.

He said that he asked the company responsible for the warehouse to reduce the rental value, but it refused to do so, calling for an assessment of the current unusual circumstances, especially since there has been a full commitment on his part for years to pay the rent allowance on time without delay.

As for the tenant, Saeed Jumaa, he saw that paying the rental values ​​of commercial warehouses is a general problem that threatens a large number of tenants, especially with the reduction of the capacity of many commercial activities, calling for a temporary collective solution, especially with many companies rejecting the idea of ​​reducing rental values.

Reduction is excluded

In addition, an official in "Ifhad Real Estate Company", who preferred not to be named, said that it is not proposed to make any reduction in the rental values ​​of warehouses.

He added that the company offered tenants the maximum it could, which is a grace period of more than three months, to pay the rents, after the predetermined date according to the concluded contract, despite the negative effects of the rent delay on the company's current and future business and activities.

He pointed out to companies that have not fully received warehouse projects from the contractor, and are currently responsible for appointing another contractor to complete the work, which requires a financial cost and time to conduct maintenance operations.

In turn, the official in another real estate company, Anwar Saeed, said that reducing rental values ​​is an issue that is not on the table at the present time, indicating that the company has responsibilities, just as tenants have responsibilities.

He stressed that any reduction in rental values ​​violates the company's responsibilities, which may lead to serious legal problems, pointing out that real estate companies have granted tenants grace periods of more than three months, despite their affected business, in order to show solidarity and full understanding between the two sides.

Emergency conditions and exceptional accidents

The advisor and director of the office of Dr. Ibrahim Hassan Al-Mulla for Advocates and Legal Consultants in Abu Dhabi, Imad Saeed Othman, confirmed to Emirates Today that the Civil Transactions Law made available in its Article 249 to the judge, based on the debtor’s request - if exceptional circumstances or general incidents arise. It could be expected, and as a result of their occurrence, the contractual obligation became burdensome to the debtor, threatening him with a heavy loss, and after balancing the interests of the parties to the contract - to restore the burdensome commitment to reasonable limits if justice so requires, taking into account the theory of emergency conditions.

He explained that what is meant by "exceptional accident" is the accident that deviates from the usual course of affairs, by taking it out of the original that people have become familiar with, making it rare, such as the spread of the Corona epidemic.

He added that it is permissible for the tenant of the located property to resort to the judge, requesting a reduction in the rent in exchange for the damage or loss of benefit that he suffered, as a result of the circumstances imposed by the pandemic, with the consequent impact of economic activities.

• The absence of a maintenance company is one of the challenges that warehouse tenants face.

Follow our latest local and sports news, and the latest political and economic developments via Google news