UAE Commercial Lease Agreements: A Practical Guide To Protecting Your Business

Understanding Dubai’s commercial tenancy rules can help businesses avoid expensive disputes.

A commercial property can be integral to your business. Whether you are renting your office, retail space, restaurant, warehouse or professional practice, it is important to understand the legal and financial implications of a lease.

There are specific rental laws governing commercial tenancy agreements in Dubai. This means that depending on the situation and wording of the agreement, a landlord/tenant can have varying levels of protection. Key issues to consider include what you can do within the property, maintenance, rent adjustments, alterations and early termination.

A business entering into a new lease or looking to negotiate renewal should ensure they fully understand the terms of the lease and what is expected. This article outlines the main legal considerations around commercial leases for mainland properties in Dubai.

Understanding UAE Commercial Tenancy Law

The main rental laws governing commercial leases are outlined in Law No. 26 of 2007 (amended by Law No. 33 of 2008). This applies to properties rented for commercial, trading and professional purposes.

Article 4 outlines the key details that should be included in a tenancy agreement. These can include a description of the property, purpose of the property, the lease term and the rent. It is important that the property is registered via the Ejari system at the Real Estate Regulatory Agency.

Generally commercial tenancy disputes will be dealt with by the Rental Disputes Centre. This was established under Decree No. 26 of 2013. You should not assume that the same laws apply across the whole UAE. Each emirate will have its own laws. In addition, financial free zones such as the Dubai International Financial Centre may have their own laws. You should ensure that you are aware of what laws apply to your property.

Approved Use of Property

It is important to ensure that you are able to carry out your business in the property. Just because it appears to be suitable, it may not be approved.

The purpose of the property should be included in the agreement (Article 4). If you are not using the property for the approved purpose or in breach of planning/land use requirements you may be evicted (Article 25(1)(f)).

Ensure that the activity you are doing is in line with the approved use, your commercial licence and any required approvals. This is especially important if you have specialist requirements.

If the landlord is not the owner they must be identified (Article 4). Ensuring that you know you have the correct approvals can help avoid disputes.

Fit Out, Maintenance & End of Lease

The cost of fit-out can be significant. Retail, restaurants and other businesses may need to install equipment, alter the interior or build. Ensure that your lease clearly states who is responsible for this work and if the landlord needs to approve it.

The landlord must deliver the property in a condition that can be used for its intended purpose (Article 15). You may agree to lease the property before construction is complete, with the tenant carrying out the work. The cost can be outlined in the agreement.

Generally you will not be allowed to make any changes without the landlord’s approval (Article 19). There may be exceptions for agreed or customary work. Ensure that you have the required approvals in writing. You should also ensure that you know if any installations can stay in place.

At the end of the lease you will generally be expected to return the property in the same condition you received it in (Article 21). Unless agreed otherwise, lease improvements cannot be removed (Article 23).

A good agreement should outline who owns the fit-out, what installations need to be removed and who pays for reinstatement. It should also outline what is considered general maintenance and what is structural. Generally the landlord will be responsible for maintenance and defects that affect the intended use of the property (Article 16).

Commercial Rent, Renewals & Extra Charges

A commercial lease can incur additional charges. District cooling, service charges and other property-related charges can all increase your costs. Ensure that your agreement clearly outlines what is included in the rent, what you will be charged separately and how the rent may increase.

Ensure that you know what charges are included in the rent. Is it inclusive or exclusive of VAT? Generally commercial rent will be subject to 5% VAT (Federal Decree-Law No. 8 of 2017), as long as the correct tax requirements are met.

You should start negotiations for a renewal early. Unless stated otherwise in the agreement, you must give the other party at least 90 days’ notice if you want to make any changes to the terms (Article 14).

If there is a dispute over the rent, the Rental Disputes Centre may decide on a fair rent based on guidelines from the Real Estate Regulatory Agency and similar rent (Articles 9 and 13).

Do not assume that your rent will be the same. You should review the renewal terms well in advance. This will allow you to understand what the financial implications will be if you stay, move or negotiate.

Can a Landlord Refuse to Renew a Commercial Lease?

Just because your commercial tenancy has reached the end of the lease does not mean you are entitled to a new long-term lease. There are specific conditions around eviction.

If the lease has ended but you continue to occupy the property without objection from the landlord, the lease will be renewed on the same terms for the lesser of the original lease period or 1 year (Article 6).

If the landlord wants to evict you at the end of the lease period, they must have one of the following reasons (Article 25(2)):

• Demolition and Rebuilding
• Restoration work that cannot be completed whilst occupied
• Owner/first-degree relative using the property
• Property to be sold.

Depending on the reason there may be conditions that need to be met. This can include obtaining permits, a technical report from the Dubai Municipality or proof that the owner does not have an appropriate property. The landlord must generally give you at least 12 months’ notice. They must also provide a reason for the eviction. This must be served via a Notary Public or registered post.

Non-residential properties cannot be let to a third party for 3 years if they have been recovered for the owner to use (Article 26).

If you have invested a lot into the fit-out of the property, it is important to consider what your chances are of getting a renewal and what the costs could be to move.

When Can a Tenant Be Evicted?

If you are a commercial tenant you may be evicted if any of the following apply (Article 25(1)):

• Failure to pay rent within 30 days of being asked to pay, unless stated otherwise in the agreement.
• Failure to remedy any breach for 30 days.
• Leaving the commercial property empty for 30 consecutive days or 90 days in total during the year without a valid reason.

You should keep records of payments and ensure that you are aware of any deadlines in the agreement. If there is any dispute, it may be important to know what notice has been served. The notice, evidence and wording of the lease may be important.

The landlord must follow the law. They cannot cut off services or interfere with your use of the property (Article 34).

Break Clause

Sometimes a business may need to vacate the property before the end of the lease. However, you should not assume that you can just leave a valid lease without the landlord’s agreement.

A valid lease cannot generally be terminated during the lease period (Article 7), except with mutual agreement.

A break clause can help provide more flexibility. This should outline who can use the break clause, how much notice needs to be given, if there is a payment due and what conditions need to be met. You may agree that the break clause can only be used if rent is up to date and there are no outstanding breaches.

If there is a payment due for early termination, the court can reduce the agreed payment if the debtor proves it is excessive (Article 340, Federal Decree-Law No. 25 of 2025 (New Civil Transactions Law)).

This does not mean you will automatically not have to pay. You should try to negotiate a clear exit process.

Assignment & Subletting

You may want to assign the lease, for example, if you are selling, restructuring or allowing another company to occupy. This will depend on the agreement and law.

Unless stated otherwise in the agreement, the tenant cannot assign or sublet without the landlord’s written approval (Article 24). If they sublet without approval they could be evicted (Article 25(1)(b)). This could affect the subtenant.

A sublease will generally end if the main lease ends (Article 8).

When negotiating the original agreement you should consider your future plans. You may want to include some clauses around assigning to associated companies, corporate changes or selling your business.

If the property changes ownership, this does not affect your lease. The sale of the building does not mean you lose your right to stay (Article 28).

Force Majeure & Hardship

Sometimes unexpected situations can occur, meaning that you cannot fulfil your commercial lease. Depending on the situation, contract and law this can have different implications.

The new Civil Transactions Law (Federal Decree-Law No. 25 of 2025) came into effect on 1 June 2026. This replaced Federal Law No. 5 of 1985. You should consider when the contract was made and any transitional provisions.

Exceptional circumstances which could not have been reasonably foreseen and cause excessive burden can be outlined in Article 224. If applicable, the court can reduce the obligation to a reasonable amount. This cannot be excluded from the agreement.

If force majeure makes it impossible to fulfil a bilateral contract then the obligations will be extinguished and the contract will automatically be cancelled (Article 236).

This should not be seen as an overall get-out clause. Financial difficulties or reduced income do not automatically mean you have force majeure or hardship. You should review the terms in your contract relating to disruption, who is responsible and what will happen.

How to Review a Commercial Lease

When reviewing a commercial lease you should ensure that you fully understand all aspects of the agreement. Ensure that the property is suitable for your licensed activity, the landlord has the authority to let the property and you can obtain all the required approvals.

Ensure that the agreement outlines who is responsible for maintenance, fit-out, reinstatement, service charges and VAT. Also ensure that you understand how rent can be adjusted, what will happen at the end of the lease, what breaches may lead to eviction and if you can terminate early, assign or sublet.

Ensure that any promises made during negotiations are included in the agreement. If you plan to invest significantly into the property you should pay particular attention to the renewal terms and what the financial implications will be if you have to move.

Seeking professional legal advice can help highlight any clauses that put you in a disproportionate position and how the lease will interact with the rental law.

Final Thoughts

A commercial lease should help you achieve your business goals. By understanding the commercial tenancy laws in Dubai you can help ensure that landlords and tenants can negotiate better terms, decide on renewals and avoid disputes.

The best way to protect yourself is to ensure that you have reviewed the lease thoroughly with guidance from Kaden Boriss. By understanding the property’s permitted use, financial commitments, maintenance responsibilities and exit options, you can make a more informed decision.

Frequently Asked Questions