Overview

  • Oman Sultani Decree No. 6/1989 on the Regulation of the Relationship between Landlords and Tenants of Residential,
  • Industrial and Commercial Premises and Registration of Lease Contracts related thereto governs the relationship between a landlord and a tenant in Oman.
  • Oman Sultani Decree No. 6/1989 governs the rights and entitlements of the landlord and tenant respectively, as well as their individual and joint obligations.
  • Lease Agreements are further governed by Oman Sultani Decree No. 29/2013 Omani Civil Transactions Law, which essentially narrates the rights and entitlements of the parties and their legal capacities for entering into a tenancy contract.
  • This Practice Note covers the maintenance responsibilities of leased properties situated in Oman.

Definitions

  • Usufruct right: Under Oman Sultani Decree No. 5/1981 on the Usufruct Law it deems this to be a real right, however the ownership is to be returned upon expiry of the finite period of 50 years or with an extension option in additional 50 years.
  • Lease: It is an agreement that formalizes the relationship of and between the landlord and the tenant.
  • Landlord: The person who lets the property on rent.
  • Tenant: The person who takes possession of the property against payment of rent.

Practical Guidance

Leasing property

  • According to Oman Sultani Decree No. 29/2013 Omani Civil Transactions Law, once the lessee takes possession of the leased property, irrespective of putting it to use, they must pay rent in full or in instalments. However, Oman Sultani Decree No. 29/2013 mandates that the rent is not payable for periods prior to the delivery of the leased property, provided the lessee did not cause the non-delivery.
  • According to Oman Sultani Decree No. 6/1989, municipalities regulate the affairs around tenancy in Oman.
  • Registration of the lease agreements before the municipality is mandatory, and it is the responsibility of the lessor to register the lease with the concerned municipality, unless agreed otherwise by the parties.
  • Non-registration of the agreement within one month of entering into the agreement, or non-payment of the taxes, currently at 5% of the rental value, will render the agreement unenforceable before any governmental authority. Additionally, a default fee, three times the fee amount, will be imposed for the duration of the delay.
  • The lessee may not transfer the lease agreement to a third party, and may not subcontract the property without the written authorization of the lessor.
  • Lease contracts will remain in force until the expiry thereof as agreed between the parties, and will be automatically renewed during the first three years of the contract, in which the lessor may not request evacuation. The lessor may request the evacuation of the premises provided that the lessee gives a notice of a minimum of three months prior to the expiry of the contract.

Maintenance responsibilities

  • In general, the lessor is responsible for carrying out the renovation and maintenance works necessary for maintaining the property in the condition in which it is leased.
  • However, the lessee is responsible for surrendering the property in the condition it was handed over to them, subject to normal wear and tear.
  • The lessee must hand over the leased property to the lessor in its original condition, and will be liable to repair all damages caused by misuse. The lessee, however, will not be liable for damage caused by normal wear and tear.
  • Parties to the lease agreement must agree to not add any improvements onto the property during the term of the lease except in accordance with the written agreement between them. The lessor, unless agreed otherwise, will be liable to pay the lessee for the costs of the agreed upon works done by the lessee on the property or the value added thereon, whichever is less. The improvements in this case will belong to the lessor upon the expiry or the termination of the lease.
  • If the lessee makes alterations or improvements to the site to prepare the leased premises for its commercial or industrial needs, then the lessee will be liable to remove the improvements. If the removal causes damages to the property, the lessee will be responsible for the repair of the damages and must surrender the property in its original condition.
  • If the misuse of the leased property by the lessee causes damages to adjoining properties, the lessee will be liable for setting right the lessor's liability towards the damaged adjoining properties.
  • Disputes arising from the rental relationship will be heard by the Court having jurisdiction over rental disputes, and the parties may appeal the judgement until the Supreme Court.

Related Content

Legislation

  • Oman Sultani Decree No. 6/1989 on the Regulation of the Relationship between Landlords and Tenants of Residential, Industrial and Commercial Premises and Registration of Lease Contracts related thereto
  • Oman Sultani Decree No. 29/2013 Omani Civil Transactions Law
  • Oman Sultani Decree No. 2/1998 Promulgating the Land Register Law
  • Oman Sultani Decree No. 5/1981 on the Usufruct Law
  • Oman Sultani Decree No. 88/1982 on the Executive Regulations of Oman Sultani Decree No. 5/1981 on the Usufruct Law
  • Oman Sultani Decree No. 29/2002 Promulgating the Law on Civil and Commercial Procedures

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