UAE Law and Practice Contributed by: Duncan Pickering, Nicola de Sylva, Sean Cope and Marta Almeida, DLA Piper Middle East LLP
6.4 Typical Terms of a Lease The terms of a lease may be freely negotiated between the parties, provided that the contents of the lease agreement do not contravene law. Both the Abu Dhabi and Dubai landlord and tenant laws include provisions in relation to the repair and maintenance, termination, eviction and term of leases where the lease agreement remains silent on such topics, and are manda - tory in application, although in practice most contracts will contain express terms on those matters and on which provisions must not con - travene the applicable law. 6.5 Rent Variation The rent payable under a lease must be speci - fied in the lease agreement, and is generally sub - ject to fixed or index-linked increases at regular intervals. In addition to a base rent, turnover rents are common in retail lettings. Market rent review provisions are also included in some leases, but these clauses are not used as frequently as they are used in more devel - oped real estate markets, since historically reli - able comparable transactions can be difficult to establish due to the lack of publicly available market data. Recent initiatives have seen the DLD launch a new rental index for residential properties (which is updated monthly and fac - tors in building state of repair and condition). It is possible this will be extended to commercial properties in the future. In addition, Abu Dha - bi introduced an official rental index in August 2024 with indicative rental values for residential, commercial and industrial properties across the Emirate.
6.6 Determination of New Rent Revised rents may be determined by applying a fixed or index-linked percentage increase, or by determining the open market rent. 6.7 Payment of VAT VAT applies to rent payable for a commercial property. 6.8 Costs Payable by a Tenant at the Start of a Lease A tenant’s liability for upfront costs should be set out in the lease agreement. The parties to a lease commonly agree that the tenant will be responsible for paying the registration fees asso - ciated with registration of the lease at the rel - evant registration department. Tenants are also generally responsible for the cost of opening an account for utilities and telecommunications, and for paying for meters and connections in new properties. A tenant may also be liable for the fees of any agent (such as real estate bro - kers) involved in the transaction. 6.9 Payment of Maintenance and Repair A commercial lease agreement may impose an obligation on the tenant to pay a service charge to the landlord, to be used for the maintenance Premises will usually be individually metered. In such cases, the tenant will usually purchase services such as electricity or water directly from suppliers. Where premises are not individu - ally metered, leases may be inclusive of utilities and telecommunications, and the landlord may recover such costs through the service charge or a separate utility charge. and repair of the common property. 6.10 Payment of Utilities and Telecommunications
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