Up Again UAE: Premises and Workplace

Employment

1. What are the key things that employers have to consider in relation to social distancing in the workplace, e.g. open plan or spacing of desks, use of shared equipment, limited access to communal facilities, canteen / restaurant, etc.?

Employees must maintain social distancing of at least 2 m in all common areas, including elevators. Elevators may not be more than 30% occupied. No more than five people may be present in any one meeting. Any equipment used by employees or customers must be regularly sanitised, and disposable utensils/cups should be used at all times in any kitchen or dining areas. 

2. What key hygiene and/or infection prevention measures will employers have to take to ensure a safe workplace e.g. provision of adequate handwashing facilities, regular deep cleaning of offices, etc.?

All communal areas, including toilet facilities, must be cleaned after each use and all entrances sterilised. Masks and hand sanitizer must be provided and disposable cups and utensils must be used when providing refreshments to visitors or customers.

The Health and Safety Department in the UAE government has issued additional precautionary measures for hotels, food establishments and shopping malls.

These measures include a requirement to increase the frequency of cleaning and disinfection and performing “intensive cleaning” and disinfection throughout the day, particularly in certain areas/parts of the building such as receptions, door handles, elevator buttons and meeting rooms. All cleaning and disinfecting must be documented

Real Estate

3. Are there any specific obligations, liabilities or duties of conduct imposed on landlords, tenants or visitors with respect to the use or re-use and decontamination of premises; care, cleaning and maintenance of the exclusive and common areas; reporting requirements and/or measures in case of identified infections; health and safety issues - e.g. recommissioning water systems to avoid virus, installation of plexiglass screens, moving desks to comply with distancing. remodulation of fire prevention strategies (entrance/exit routes)? Is any distinction made between asset classes?

Dubai Municipality has issued various circulars and guidance documents on precautionary measures to be followed in wholesale and retail trade, manufacturing, offices, entertainment venues and construction sites.

These guidelines, drafted by Dubai Municipality’s Health and Safety Department and Building Control Department, include increased frequency of disinfection and cleaning, capacity limits, and social distancing of 2 m to be practiced in specific areas.

At the time of writing, Dubai has reopened the majority of its swimming pools, play areas, cinemas, gyms, shopping malls, museums, libraries, art galleries and public beaches. Offices in Dubai are permitted to operate at 100% capacity, subject to strict physical distancing and health and safety measures. In addition, Dubai has set in place various safety measures and checks to prepare the city to open for tourism, including the re-opening of hotels and entertainment venues. The implementation of advance ticket bookings and contactless payment options are encouraged in order to reduce queues to comply with social distancing requirements, in line with the UAE Central Bank urging citizens to use contactless payment options.

Abu Dhabi has taken its own line of measures and form of implementation by adopting a “Go Safe” certification requirement, which will be issued by officials from the Department of Culture and Tourism following a verified inspection of the premises. Malls are now operating at 60% capacity, with the age restrictions allowing for children under 12 to enter, and an upper age limit still at 70. Food and beverage outlets are now permitted to operate at 80% capacity, but must restrict the number of people per table to four, and ensure a 2 m distance between tables. Waiting areas remain closed, and masks and sanitisers should be available to all clientele. Museums and cultural places are operating at 40% capacity, and cinemas have reopened, operating at 30% capacity. 

The following restrictive measures continue to apply to all of the emirates:

  • age limits for shoppers entering;
  • sanitation gateways for members of the public;
  • thermal camera installations;
  • requiring customers and staff to wear protective masks.

4. Are there any rent suspension measures and/or stay of recourses and actions (including eviction) or any Government support initiatives such as a furloughed building grant scheme (if so, maybe only a part of the building should be re-occupied)? When rent suspension measures are available, what is the usual payment mechanism and timing agreed to by the parties?

The federal government has introduced an AED16 billion stimulus package, and although changes to legislation have not been proposed, rent relief measures have been offered onshore and within the free zones and from various developers to residential, commercial and retail tenants.

As a starting point, the position on rent suspension will vary depending on the contractual terms between the parties. However, market practice has indicated that landlords are offering three-month rental waivers, with rental payments to resume on conclusion of the three months subject to a further review.

In addition, each emirate is offering its own additional relief measures, such as:

  • subsidies on water and electricity utility bills;
  • suspension of tourism and entertainment municipality fees;
  • suspension of registration fees until the end of 2020 in Abu Dhabi; and
  • reduction of municipality fees imposed on sales at hotels.

5. Are there specific tax reliefs on payment or collection of rent instalments? Do they apply subject to actual payment or regardless? Do they apply generally or only to specific asset classes?

There are no specific tax reliefs on rent instalments.

6. Are there any measures regarding relief from the performance of real estate-related contractual obligations?

No changes to legislation governing commercial and residential tenancies have been proposed regarding real-estate related contractual obligations.

However, several measures have been introduced at the emirate level and by developers to ease the financial burdens on tenants affected by COVID-19.

The rulers of Abu Dhabi and Dubai have each issued directives temporarily suspending rental eviction proceedings in their respective emirates to protect tenants.

7. Are there any credit facilities in place to mitigate loss of income for landlords?

There are no UAE credit facilities in place to mitigate loss of income specifically for landlords.

The economic stimulus package implemented by the federal government is aimed at offering relief to all its citizens affected by COVID-19. At the emirate level, local banks have collaborated to offer relief on personal loan repayments.

8. Is there any relief from loan repayments / enforcement of loans secured against properties?

The Abu Dhabi Department of Finance, Abu Dhabi Department of Economic Development and several UAE banks have unveiled a comprehensive package of initiatives to support the community and business. The package includes:

  • reduction of required down-payment by 5% for first-time homebuyers;
  • reduced bank charges by 50% on early settlement of existing mortgage loans for eligible customers until 30 June 2020; and
  • deferred instalments (principal and interest) on new borrowing for up to three months for eligible customers until 30 June 2020, with 50% reduction in associated bank charges.

9. Are public services necessary to complete the sale, acquisition or other operation of real estate assets or companies or to establish the right to open for business (planning authorities, notary public, Land Registry, Companies’ Registry, etc.)?

There have been several significant adaptations to certain public services to accommodate the obvious restrictions and challenges in completing real estate transactions in the UAE.

The Dubai Land Department has adopted the Dubai Pay portal for remote payment services to facilitate the process of real estate registration.

Abu Dhabi Municipality’s Tawtheeq system for online registrations and payments has also been increasing its capabilities to facilitate real estate related transactions in light of COVID-19.

10. Are there any specific processes or protocols available to consummate real estate operations enabling them to comply with any required social distancing (e.g. electronic signature, etc.)?

Electronic signatures are governed by Federal Law No 1 of 2006 on Electronic Commerce and Transactions, and although businesses have been relying more heavily on the use of e-signatures during COVID-19, there are certain transactions that are not eligible. These include transactions involving the sale, purchase, lease (for a term of more than ten years) and other dispositions of immovable property and the registration of other rights relating to immovable property.

E-signatures may be accepted for leases of less than ten years, and in practice the DIFC and ADGM have been accepting certain real estate documentation executed by e-signature, subject to the relevant criteria being met.

The Dubai Land Department has introduced a remote property transaction system using audio-visual communication for party identification, with purchase monies transferred through an escrow account managed by the Department.

11. Are contractors who were carrying out works within the premises obliged to resume them? Can building sites reopen when they were closed down? Are there any specific provisions in relation to certain asset classes authorising continuation / resumption of works (e.g. healthcare structures)?

Dubai Municipality issued a guidance document advising on precautionary measures to be taken on constructions sites, and clarifying that the construction sector will be considered an essential sector and therefore exempt from any remote work directive issued by the Dubai authorities.

This is subject to relevant health and safety measures being applied properly to protect employees. Such health and safety measures include:

  • increased frequency of sanitation of any equipment used;
  • limiting any gatherings or meetings;
  • social distancing of 2 m in specific areas; and
  • temperature checking on entry and exit of the premises and refusal of entry to any employees showing symptoms.

12. Are there remedies or contractual arrangements available to address impossibility or delay for a party to handover premises to another which are/were to be constructed or refurbished, or for such other party to take over those premises?

The contractual arrangements will vary and the remedies for impossibility or delay for handover of the premises is contract-specific.

Frustration and force majeure may also be relevant.

There are several grounds under the FIDIC Red Book on which contractors could seek to bring a claim for extension to the time for completion. The success of such claims will depend on whether they meet the necessary contractual requirements.

13. Has the duration of validity of administrative authorisations pertaining to development/construction of real estate assets (in particular planning authorisations) been extended?

At present, there have been no legislative changes relating to the duration of resource consents and building consents.

Applications can be submitted online to the relevant planning authority across the Emirates, as online systems have been developed and have the capacity to review and issue approvals for certain administrative authorisations.

Litigation and Regulation

14. Is the use of disclaimers for visitors or others coming on to the site of business useful for limiting potential future COVID-19 claims?

Asking visitors or others to sign a disclaimer may prompt people to take more responsibility for themselves and deter claims being made in the first place.

But it is unlikely that such a disclaimer can be used to abrogate duties imposed on business owners during the crisis, including those under the Government Guidelines and Protocol for Reopening, such as implementing social-distancing procedures, providing enhanced sanitisation, and carrying out temperature checks.