TRW & Co · Real Estate, Construction & Energy
Commercial Leasing in the UAE
Commercial leasing in the UAE is governed emirate by emirate, with separate regimes in free zones and the DIFC and ADGM. Rent increase rules, registration, renewal protections and eviction notices differ by location, and a lease often underpins a trade licence. This guide explains the rules, the key terms to negotiate and how to avoid the disputes that cost tenants and landlords most.
Key pointIn Dubai, eviction on expiry for the owner's use, sale or redevelopment needs 12 months' notice through a notary or registered mail, and rent changes need 90 days' notice before expiry; missed formalities usually defeat the claim.
At a glance
Emirate-level regimes
Dubai, Abu Dhabi and the other emirates each have their own tenancy law and registration system, while the DIFC and ADGM run separate property regimes.
Ejari registration
Dubai leases are registered on Ejari; registration supports trade licensing and dispute filings, and fees are modest through the DLD app or trustee centres.
90-day change notice
In Dubai, a party wanting to change rent or terms at renewal must notify the other at least 90 days before the lease expires, unless otherwise agreed.
Index-linked rent increases
Dubai renewal increases follow the DLD rental index, ranging from nil to 20% depending on how far rent is below market, with three months' notice.
12-month eviction notice
Eviction on expiry for owner use, sale or demolition in Dubai needs at least 12 months' notice served by notary public or registered mail.
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What commercial leasing in the UAE covers
Commercial leasing in the UAE covers the rental of offices, shops, mall units, warehouses, industrial plots, showrooms and staff accommodation used for business. It sits at the junction of property law, company licensing and tax: a lease is usually needed before a trade licence can be issued or renewed, its registration affects how disputes are heard, and its terms shape the tenant's exit options for years.
The rules are not uniform. Leasing is regulated mainly at emirate level, so Dubai, Abu Dhabi and the northern emirates each have their own tenancy legislation, registration systems and dispute bodies. The DIFC and ADGM run separate common-law based property regimes, and many free zones impose their own lease forms through the free zone authority. A tenant with sites in several emirates is dealing with several legal systems.
A commercial lease becomes a legal question well before signature. Rent-free periods, fit-out obligations, service charges, break rights, renewal protections and reinstatement duties are all negotiated at heads of terms, and the law limits what can be agreed in some areas while leaving others wide open.
The legal framework by location
The first step in any commercial leasing in the UAE question is to identify which regime applies. That depends on the emirate and on whether the premises sit onshore, in an ordinary free zone, or in one of the financial free zones.
| Location | Main rules | Registration | Disputes |
|---|---|---|---|
| Dubai mainland | Dubai landlord and tenant legislation and the rent increase decree, administered by the Dubai Land Department and RERA | Ejari | Rental Disputes Center |
| Abu Dhabi mainland | Abu Dhabi tenancy legislation, administered through the Abu Dhabi Real Estate Centre | Tawtheeq | Abu Dhabi rental dispute committees and courts |
| Other emirates | Each emirate's own tenancy law and municipal registration | Local municipal systems | Local rent committees or courts |
| Ordinary free zones | Free zone authority lease terms, often alongside emirate law | Free zone authority | Depends on the zone and lease |
| DIFC and ADGM | Their own real property and leasing legislation | DIFC or ADGM property registry | DIFC Courts or ADGM Courts |
Dubai in more detail
Dubai's tenancy legislation applies to both residential and commercial premises, so many protections that tenants associate with housing also apply to shops and offices. Dubai Land Department guidance, collected on its rules and regulations page including the Tenancy Guide, confirms three points that drive negotiations:
- A party wishing to change the lease terms or the rent at renewal must notify the other at least 90 days before expiry, unless the parties agree otherwise.
- A rent increase must follow the rent increase decree and the DLD rental index, with three months' prior notice. Permitted increases range from nil to 20%, depending on how far the current rent is below the average market rent.
- Eviction at the end of a lease for the landlord's own use, sale or demolition requires notice through a notary public or registered mail, with at least 12 months between notification and the eviction date.
The DLD notes that the rental index is indicative and not mandatory for a new lease, so the cap bites on renewals, not on first-time rents. The DLD rental index includes a commercial calculator for shopping mall units, alongside separate industrial and staff accommodation categories.
Abu Dhabi and the northern emirates
Abu Dhabi has its own tenancy legislation and registers leases through Tawtheeq, administered by the Abu Dhabi Real Estate Centre. Sharjah, Ajman, Ras Al Khaimah, Fujairah and Umm Al Quwain each apply their own tenancy rules and municipal registration. Notice periods, rent increase controls and eviction grounds are not identical to Dubai's, so a lease template drafted for Dubai should be checked before it is used elsewhere. Confirm the current local rules at the time of signing, as several emirates have updated their tenancy frameworks in recent years.
Free zones, DIFC and ADGM
In ordinary free zones the lease is often on the authority's standard form, and the trade licence is tied to premises within the zone. In the DIFC and ADGM, leases are governed by the centres' own property legislation and registered with their registries, and disputes go to the DIFC Courts or ADGM Courts unless the parties agree otherwise. These regimes generally give the parties more contractual freedom than mainland tenancy laws.
Key commercial terms and how to approach them
Good commercial leasing in the UAE outcomes come from negotiating the terms that the law leaves open. These are the points that cause the most disputes.
Term, renewal and break rights
Mainland tenancy law gives tenants meaningful renewal protection, but a short initial term still exposes a tenant to rent reviews. Negotiate a term that matches fit-out investment, and an express break right if the business case is uncertain.
Rent, increases and payment
Agree the number of cheques or instalments, the treatment of VAT and whether increases are fixed or index-linked. In Dubai, any increase on renewal must still respect the rental index rules.
Fit-out and reinstatement
Commercial units are often handed over in shell and core. Agree rent-free fit-out periods, landlord approvals, ownership of fixtures and the exact condition the unit must be returned in.
Service charges and outgoings
Clarify who pays service charges, chiller fees, utilities and municipal fees. In jointly owned buildings, the DLD's service charge index helps test whether charges passed on are reasonable.
Assignment and subletting
Most leases prohibit subletting without consent, and unauthorised subletting is a classic eviction ground. Group restructurings and shared-office arrangements need consent built in.
Use and licensing
The permitted use clause must match the activity on the trade licence. A mismatch can stop the licence being issued or renewed and gives the landlord leverage.
In Dubai, the rental index caps increases on renewal, not the starting rent. The opening rent in a new commercial lease is a pure negotiation, so it deserves more attention than the renewal clause.
The leasing process step by step
A typical mainland Dubai office or retail lease follows the sequence below. Abu Dhabi and the free zones follow similar commercial steps with different registration systems.
- Define requirements and check licensing. Confirm the licensed activity, the premises size the licensing authority requires and whether the zone permits it. Office size can affect visa quotas for staff.
- Agree heads of terms. Record rent, term, rent-free periods, fit-out, service charges, deposits, break rights and conditions. State that heads of terms are not binding except on confidentiality and exclusivity, if that is the intent.
- Due diligence on the landlord and unit. Verify title and the landlord's authority to lease, any mortgage over the property, building approvals for the intended use and outstanding service charges.
- Negotiate and sign the lease. The unified tenancy contract is commonly supplemented by an addendum carrying the commercial terms. Ensure the addendum does not conflict with mandatory tenancy law protections.
- Register the lease. In Dubai, register on Ejari through the DLD Ejari service, an authorised trustee centre or a licensed property manager. The registration certificate is needed for licensing and utilities.
- Fit-out approvals and handover. Obtain landlord, master developer and civil defence approvals before works start, and record the unit's condition at handover with photographs and a signed snagging list.
- Manage the lease. Diary renewal and notice dates, especially the 90-day window before expiry, and keep records of payments, notices and correspondence.
Ejari fees are modest, currently around AED 178 through the DLD app or website and AED 220 at a trustee centre, according to the DLD. The real cost of not registering is losing the ability to rely on the lease efficiently for licensing, utilities and dispute filings.
Documents and evidence to keep
Tenancy disputes in the UAE are decided largely on documents. Keep a complete lease file from day one.
- Lease documents: signed tenancy contract and addenda, registration certificate (Ejari or Tawtheeq), heads of terms and any side letters.
- Landlord evidence: title deed or lease of the landlord, power of attorney of any signatory and, for a sublease, the head landlord's consent.
- Payment records: cheque copies, bank transfer confirmations, VAT invoices and receipts for deposits.
- Notices: every renewal, increase, default and eviction notice, with proof of delivery. In Dubai, owner-use and sale eviction notices must be notarised or sent by registered mail.
- Condition records: handover reports, fit-out approvals, maintenance requests and the landlord's responses.
- Licensing documents: trade licence, establishment card and approvals linked to the premises.
Risks and common mistakes in commercial leasing in the UAE
Missing the 90-day notice window
In Dubai, a party that wants to change the rent or terms on renewal must notify the other at least 90 days before expiry. Landlords who send a late notice usually cannot impose the increase for that renewal; tenants who want to renegotiate or leave without clear break rights face the same timing pressure. Diary the notice date when the lease is signed, send notices by a method that proves delivery, and record the date the other side received them.
Assuming the landlord can evict at will on expiry
Dubai tenancy law limits eviction on expiry to specified grounds, such as the owner's genuine need to use the property, sale, or demolition and redevelopment, and requires 12 months' notice through a notary or registered mail. During the term, eviction grounds include non-payment after a 30-day notice, unauthorised subletting and illegal use. Landlords who skip the formalities lose eviction claims; tenants who ignore a properly served notice lose valuable negotiating time. Read the notice carefully before reacting.
Signing an addendum that conflicts with mandatory rules
Commercial addenda sometimes include clauses allowing the landlord to raise rent at will or to evict on short notice. Where mainland tenancy law applies, clauses that cut across its protections may not be enforced. That cuts both ways: a landlord relying on such a clause may be disappointed, and a tenant who agreed to a valid alternative arrangement, such as a fixed escalation, may find it upheld. Draft the addendum with the governing tenancy law in mind.
Overlooking VAT and service charges
Commercial rent is generally subject to VAT, while residential leases usually are not. A lease that states rent without clarifying whether VAT is included invites a dispute about who bears it. Service charges, chiller fees and district cooling charges can add materially to occupancy costs, and many leases say little about how they are calculated. Ask for budgets and recent invoices, and set out in the lease how increases are justified. Our VAT page explains the tax side.
Leaving reinstatement undefined
At the end of a lease, landlords often claim the cost of returning the unit to shell and core, deducting it from the deposit or bringing a claim. If the lease does not specify the reinstatement standard and the handover condition was not recorded, the tenant has little to rely on. Agree in the lease which fit-out items may stay, attach a schedule of condition at handover and obtain a signed handback report when you leave.
Points for landlords and investors
Landlords and investors approach commercial leasing in the UAE from the other side of the table, and their priorities are income security, flexibility to redevelop and clean documentation that survives a sale or refinancing.
Income security
Mainland tenancy protections mean a landlord cannot simply refuse to renew a performing tenant to re-let at a higher rent. Value therefore depends on getting the opening rent, the escalation structure and the security package right. Security deposits, post-dated cheques, bank guarantees and parent guarantees each have different enforcement routes, and a mix is common for larger tenants. Record clearly what the deposit covers and when it is returned.
Redevelopment and sale
Where a building may be redeveloped or sold, plan the notice strategy years ahead. The 12-month notice requirement in Dubai and the need to show a genuine ground mean that vacant possession cannot be produced quickly. Buyers of tenanted buildings should check every lease for notices already served, renewal rights and side letters, because the buyer generally steps into the landlord's position.
Portfolio documentation
Lenders and buyers will ask for a rent roll reconciled to registered leases, evidence of payment history and copies of all notices. Inconsistent addenda across a building, unregistered leases or informal rent concessions reduce value and slow transactions. A standard addendum, a consistent fit-out guide and a central notice log are inexpensive ways to protect the asset.
Disputes and enforcement
In Dubai, lease disputes must be filed with the Rental Disputes Center, which handles claims for rent, eviction, deposits and maintenance. The DLD publishes guidance on contractual disputes and on related fees, such as inspection and sequestration costs calculated on the annual rent. In Abu Dhabi and the other emirates, specialised rental committees or the courts deal with tenancy cases. DIFC and ADGM leases go to their own courts.
Many disputes can be resolved by negotiation if each side understands its legal position early, particularly where the landlord's notice is defective or the tenant's payment record is clean. For contested cases see our pages on real estate and rental disputes and mediation and settlement. Where representation is required before the Rental Disputes Center, UAE onshore courts or the DIFC and ADGM Courts, we work alongside locally licensed advocates and registered practitioners.
Cross-border angle
Many tenants are regional or international businesses whose real estate decisions are approved at head office. That creates specific issues for commercial leasing in the UAE.
Head office approvals. Companies headquartered in London, Singapore, Dhaka or Shanghai often expect lease structures common at home, such as long fixed terms with upward-only reviews or tenant-only break clauses. UAE tenancy law may give tenants more protection, or less, depending on the emirate and zone. Explain the local position to head office before they sign off a template that will not work.
Guarantees. Landlords frequently ask foreign parents for guarantees or bank guarantees. Check governing law, enforceability in the parent's home country and how a guarantee interacts with any break right. Indian, Bangladeshi and Chinese parents may need home-country approvals before giving guarantees for overseas subsidiaries.
GCC expansion. Businesses rolling out across Saudi Arabia and the UAE should not assume the same lease template works in both. Registration, rent controls and eviction rules differ, so align the commercial terms and localise the legal clauses. For entity choice, see our pages on free zone company formation and mainland company structures.
How TRW & Co helps with commercial leasing in the UAE
We act for tenants, landlords and investors on commercial leasing in the UAE, from single offices to multi-site portfolios. Our work includes:
- Heads of terms and lease negotiation for offices, retail, warehouses and industrial premises across mainland, free zone and DIFC/ADGM locations.
- Lease reviews for acquisitions, financings and portfolio audits, flagging renewal risks, break rights and reinstatement exposure. See our real estate acquisition page for transaction work.
- Landlord documentation, including standard addenda, fit-out guides and notices, coordinated with property management arrangements.
- Dispute strategy for rent, eviction and reinstatement claims, working with locally licensed advocates where hearings are required.
Our practice areas cover the licensing, tax and corporate questions that sit around a lease, and our real estate regulation guide explains the wider regulatory picture.
Checklist for decision-makers
- Which regime governs the premises: Dubai, Abu Dhabi, another emirate, a free zone, the DIFC or ADGM?
- Does the permitted use match the activity on your trade licence?
- Have you verified the landlord's title, authority to lease and any mortgage?
- Are rent, VAT, service charges and payment instalments clearly stated?
- Are fit-out, rent-free periods and reinstatement obligations defined, with a schedule of condition?
- Is the lease registered on Ejari, Tawtheeq or the relevant registry?
- Have you diarised the 90-day renewal notice date and any break-right deadlines?
- Do any parent guarantees need home-country approvals?
If you are negotiating a new lease or facing a renewal, increase or eviction notice, contact TRW & Co for advice on commercial leasing in the UAE.
Frequently asked questions
01Does Dubai tenancy law apply to commercial leases as well as residential?
Yes. Dubai's landlord and tenant legislation applies to both residential and commercial premises on the mainland, so rules on renewal notices, rent increases under the rental index and eviction grounds apply to offices, shops and warehouses too. Leases in the DIFC are governed by the DIFC's own property legislation instead. Some free zones also apply their own lease terms. Check which regime governs the premises before relying on any particular protection.
02How much can a Dubai landlord increase commercial rent on renewal?
Increases on renewal follow the rent increase decree and the Dubai Land Department rental index. Permitted increases range from nil to 20%, depending on how far the current rent is below the average market rent for comparable premises, and the landlord must give three months' notice. The index is indicative for new leases, so the starting rent of a new lease is freely negotiable. Use the DLD rental index calculator, which includes a commercial category for mall units, to test a proposed increase.
03Can a landlord evict a commercial tenant when the lease ends?
Only on specific grounds. In Dubai, the landlord can recover the premises at expiry where the owner genuinely needs them for personal use, intends to sell, or plans demolition or major renovation, and must give at least 12 months' notice through a notary public or registered mail. During the term, eviction is possible for defaults such as non-payment after a 30-day notice, unauthorised subletting or illegal use. Procedural mistakes in the notice are a common reason eviction claims fail.
04Is registering a commercial lease on Ejari mandatory?
In practice, yes. Ejari registration is the Dubai Land Department's system for recording tenancy contracts, and the certificate is required for trade licence issuance and renewal, utility connections and filing disputes at the Rental Disputes Center. Registration can be done through the Dubai REST app or website, a licensed property manager or an authorised trustee centre. In Abu Dhabi the equivalent system is Tawtheeq. DIFC and ADGM leases are registered with those centres' own registries.
05Is VAT charged on commercial rent in the UAE?
Commercial leases are generally subject to VAT at the standard rate, while most residential leases are exempt. The lease should state whether the rent includes VAT and require the landlord to issue valid tax invoices so the tenant can recover input tax where eligible. Service charges and other recharges may also carry VAT. Clarify the position in the heads of terms to avoid disputes over who bears the tax.
06Where are commercial lease disputes heard?
It depends on location. Mainland Dubai lease disputes must be filed with the Rental Disputes Center, which hears rent, eviction, deposit and maintenance claims. In Abu Dhabi and the other emirates, specialised rental committees or courts hear tenancy cases. Leases of premises in the DIFC or ADGM are heard by those centres' courts unless the parties agree otherwise. Arbitration clauses in mainland leases may not oust the jurisdiction of the specialised rental bodies, so take advice before relying on one.
07What should a tenant check before signing a commercial lease?
Confirm the landlord's title and authority, any mortgage over the property, and that the building approvals permit your intended use. Check that the permitted use matches your trade licence, and that rent, VAT, service charges, fit-out periods and reinstatement duties are clearly defined. Make sure renewal and break-right dates are workable, and that the lease will be registered. If a parent company is giving a guarantee, check whether home-country approvals are needed.
Sources and official materials
- DLD: Register or renew a tenancy contract (Ejari) — Ejari registration channels, documents and fees
- DLD Rental Index — Rental index calculator including commercial mall units
- Dubai Land Department FAQ — Notice periods, rent increases, eviction and RDC guidance
- DLD Rules and Regulations — Tenancy Guide, rent increase decree and real estate legislation
- DLD: Inquiries concerning contractual disputes — Rental and contractual dispute guidance
- DLD Service Charge Index — Approved service charges for jointly owned properties
General information only, current as at 27 October 2026. It is not legal advice and does not create a lawyer–client relationship. UAE law differs between the onshore jurisdiction, the DIFC, ADGM and the free zones, and changes frequently; check current official sources and take advice on the facts of your matter.
