UAE Law and Practice Contributed by: Duncan Pickering, Nicola de Sylva and Sean Cope, DLA Piper Middle East LLP
is insolvent, the regular landlord and tenant laws would apply, which would comprise the reme - dies for failure to pay rent. There are no provi - sions 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 credi - tor 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. 6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations Parties are free to negotiate the form of security to be provided. Typically, a landlord may ask for a security deposit, bank guarantee and/or parent company guarantee. Although it is common for a landlord to take a security deposit from a tenant, there is no statu - tory guidance on how such deposits must be held, when they can be utilised and when they must be returned. It is important, therefore, to ensure that a lease contains detailed provisions on dealing with the security deposit. 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 land - lord and tenant laws set out a standard position to be implied into the contract; and if a party does not wish to renew or wishes to re-negotiate 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 otherwise agreed, the landlord may withhold or grant its consent at its sole dis - cretion. 6.19 Right to Terminate a Lease In Abu Dhabi, tenants have a statutory right to request the Rent Dispute Settlement Committee to terminate a lease where the landlord hands over the property in such a poor condition that it cannot be used for its intended purpose. The Civil Code also allows parties to an agree - ment to agree to an early termination. Break rights in longer-term leases are common, to allow tenants greater flexibility. Landlord break rights are less common and may not be effective in Abu Dhabi, unless the landlord can also establish a ground for termination. 6.20 Registration Requirements Abu Dhabi Leases of less than four years are required to be registered by the landlord (or property manage - ment company) in the Tawtheeq system. Leases
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