Notice and early termination
Start with the contract. It should state how much notice the tenant must give, whether the lease renews automatically, and what happens if the tenant leaves early. In Dubai, if a tenant stays on after expiry without objection from the landlord, the law generally treats the lease as renewed on the same terms, so a clear written notice to vacate, with a date of receipt, matters.
Early termination penalties are a matter of contract. Many residential leases specify a fixed number of months' rent; commercial leases vary widely. Apply the clause as written, and if the lease is silent, take advice rather than inventing a figure.
- Log the notice date and the agreed move-out date on the lease record.
- Confirm in writing which clause governs any early-exit penalty.
- Book the move-out inspection before the keys are returned.
Pro-rata rent and the cut-off date
Fix a single cut-off date, normally the date the keys are returned and the unit is handed back. Rent is then due up to that date. Decide your day-count convention in advance (actual days in the month, a 30-day month or a 365-day year) and use it consistently; small differences in convention are a common source of argument.
Cheques dated after the cut-off are no longer owed and should be returned to the tenant against a signed receipt. Cheques already deposited for a period after the cut-off should be refunded through the settlement.
Inspection, damages and evidence
A damage charge is only as strong as the evidence behind it. Compare the move-out condition with the move-in record room by room, using dated photographs from both inspections, meter readings and a checklist signed by both sides where possible. Distinguish fair wear and tear, which is normally the landlord's cost, from damage beyond normal use.
Price damages, cleaning and painting from a published rate card rather than case by case. A rate card agreed in advance is easier to defend and quicker to apply.
PropertyHive's move-in and move-out checklists hold photo evidence and meter readings on the lease. AI can describe inspection photos and flag possible damage, and a person confirms before anything is saved. Cleaning, painting and damage rates are held as settlement settings.
Clearances: utilities, cooling and Ejari
Before the deposit is released, the tenant should close the accounts in their name. In Dubai this usually means a DEWA final bill and clearance, and, where the building has district cooling, a final bill or NOC from the cooling provider. In Abu Dhabi, the equivalent clearances come from the local utility.
The tenancy registration must also be closed: Ejari cancellation in Dubai, Tawtheeq in Abu Dhabi. An open registration can block the next tenant's registration and the outgoing tenant's new one, so make it part of the checklist, not an afterthought.
In PropertyHive, a deposit refund checks DEWA, cooling NOC, Ejari or Tawtheeq cancellation, inspection and keys. The Ejari tab prepares termination registrations and runs in an integration-ready mode; it does not register with DLD live.
- DEWA (or local utility) final bill paid and clearance received.
- District cooling final bill or NOC, where applicable.
- Ejari or Tawtheeq cancellation completed.
- All keys, access cards and parking tags returned.
Deposit offset and VAT
Build the settlement as a list of lines: rent to the cut-off, any early-exit penalty, damages, cleaning and painting, admin fees, VAT where it applies, less rent already paid for later periods, less the security deposit. The net figure is either a refund to the tenant or an amount still owed.
VAT treatment depends on the lease and on the nature of each line. In the UAE, residential leases are generally exempt from VAT and commercial leases are standard-rated at 5%. Charges that pay for a service, such as cleaning, may be treated differently from compensation for damage or for ending a contract early, and the Federal Tax Authority has published guidance on compensation payments. Agree the treatment of each line type with your tax adviser and set it once.
PropertyHive's settlement form runs from line A to N, covering pro-rata rent, early-exit penalty, damages, cleaning rate card, admin fee, VAT and deposit offset, with the day-count convention and VAT set in settings.
Approvals and the final statement
Every override, waiver or manual adjustment should carry a written reason, and larger amounts should need a second person's approval. Set the threshold in your delegation of authority and stick to it. Then issue one clear statement to the tenant, in English and Arabic, that shows every line, the evidence behind it and the net amount, and pay any refund promptly once the statement is agreed.
In PropertyHive, overrides need a reason, and manual changes, waivers and refunds over AED 50,000 need a manager. A settlement moves from draft to review, approved, settled and closed, and produces a bilingual EN/AR PDF statement. Move-out requests from the tenant portal feed straight into settlement, and cheques dated after the cut-off are flagged for return.
- Every line traceable to the contract, a rate card or evidence.
- Overrides and waivers carry a reason and an approver.
- Post-cut-off cheques returned against a signed receipt.
- Bilingual statement issued and the refund paid or balance invoiced.
