UAE Law and Practice Contributed by: Duncan Pickering, Nicola de Sylva, Sean Cope and Marta Almeida, DLA Piper LLP
6.17 Right to Occupy After Termination or Expiry of a Lease If a lease term expires and the tenant remains in the property with the landlord’s knowledge and without any objection by the landlord, the lease shall (in Abu Dhabi) be renewed for a similar term and on the same conditions, or (in Dubai) renewed for a similar term or a period of one year (whichever is less) on the same terms. If the lease agreement does not specify the terms of renewal, the Abu Dhabi and Dubai landlord and ten - ant laws set out a standard position to be implied into the contract, and if a party does not wish to renew or wishes to renegotiate the terms of the lease, notice must be given in accordance with the landlord and tenant laws. 6.18 Right to Assign a Leasehold Interest In Abu Dhabi and Dubai, a tenant may only assign the lease or sublease all or part of the leased premises with the written consent of the landlord. Unless oth - erwise agreed, the landlord may withhold or grant its consent at its sole discretion. 6.19 Right to Terminate a Lease The new Civil Code has broadened and clarified feder - al principles governing lease termination which apply subject to contract and operate on a supplementary basis alongside the emirate‑specific landlord and tenant termination regimes in Abu Dhabi and Dubai, which continue to govern termination in practice, and are summarised below. Abu Dhabi In Abu Dhabi, a tenant may apply to the Rent Dispute Settlement Committee to terminate a lease where the landlord hands over the property in a condition that renders it unfit for its intended use, or fails to remedy such condition within a reasonable time. The Civil Code also permits the parties to agree con - tractual early termination rights. In practice, tenant break rights are common in longer‑term commercial leases, while landlord break rights are less common and may not be effective unless supported by a statu - tory ground for termination.
Commercial Commercial leases have similar rules to those applica - ble to residential leases, with minor exceptions. Three months’ notice for renewal or termination is required for commercial leases. Dubai The same laws currently apply to residential, indus - trial, office and retail leases. The exception to this is accommodation provided by an employer to an employee. The DIFC Leasing Law 2020 draws a dis - tinction between leases of commercial and residential premises, with enhanced protections afforded to ten - Hotel establishments, including licensed serviced or hotel apartments, are excluded from the landlord and tenant regimes in both Abu Dhabi and Dubai, save where units are leased on a conventional residential basis outside the applicable hotel‑licensing frame - work, in which case tenancy legislation may apply. 6.16 Effect of the Tenant’s Insolvency ants of residential premises. Hotels/serviced apartments Insolvency law applies only to commercial companies. If a tenant (not a commercial company) is insolvent, the regular landlord and tenant laws would apply, which would comprise the remedies for failure to pay rent. There are no provisions specific to insolvency in the landlord and tenant laws. Under insolvency law, the debtor must first apply to the court for: • a preventative composition, in which case it is the debtor’s duty to inform the court, within 30 days of doing so, of all and any creditors’ rights against the debtor; or • bankruptcy, in which case any ordinary creditor of ordinary debt under AED100,000 can apply to the court to open proceedings, as long as the creditor has warned the debtor to settle in writing and this has not been done within 30 days of the written notice to settle.
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