Commercial Lease Check UAE

In the UAE, commercial leases must comply with RERA Law No. 26 of 2007 and Federal Decree Law No. 33 of 2021 on commercial transactions. Key checks include verifying the lease duration (up to 99 years for freehold properties), rent escalation clauses limited to 5% annually, and security deposit caps at 5% of total rent. Tenants face risks from unclear maintenance obligations under Article 12 of RERA, potentially leading to disputes in Dubai courts. GCC-wide, similar rules apply in Saudi Arabia's Commercial Companies Law, but UAE specifics demand scrutiny of Ejari registration for enforceability.

Key Clauses to Scrutinise

Examine the 'rent review' clause under RERA guidelines, which mandates escalations not exceeding 5% per year or the UAE inflation rate, whichever is lower, to prevent arbitrary hikes. Check the 'fit-out approval' section, requiring landlord consent for alterations per Article 8 of RERA Law No. 26 of 2007, with non-compliance risking eviction. Security deposits should not surpass five years' rent equivalent, as per Dubai Land Department rules, refundable within 30 days post-termination minus damages. Review 'subletting rights' under Federal Decree Law No. 33 of 2021, which prohibits it without explicit permission, exposing tenants to fines up to AED 50,000. Finally, assess 'termination notice' periods, typically 90 days for leases over three years, to avoid premature disputes.

Common Pitfalls and Warnings

Beware of vague 'maintenance responsibilities' clauses; under RERA Article 15, landlords handle structural repairs, but tenants cover interior upkeep—failure to delineate can lead to AED 20,000+ arbitration costs. In Dubai, unregistered leases via Ejari face nullification, as seen in 2023 DLD rulings invalidating 15% of disputed contracts. Watch for 'force majeure' exclusions omitting regional events like sandstorms, potentially voiding relief under UAE Civil Code Article 249. GCC tenants in Saudi Arabia should note Commercial Lease Law limits deposits to three months' rent, differing from UAE norms. Hidden fees, such as 10% service charges without itemisation, have triggered Consumer Protection complaints, recoverable via RERA mediation within 60 days.

Key Points

• • Verify Ejari registration to enforce lease per RERA Law No. 26 of 2007.
• • Cap rent escalations at 5% annually under Dubai Land Department guidelines.
• • Limit security deposits to 5% of total rent value in free zones.
• • Secure subletting consent to avoid AED 50,000 fines from violations.
• • Professional review with TenderScan uncovers hidden risks, saving thousands in disputes.