UAE Law and Practice Contributed by: Duncan Pickering, Nicola de Sylva, Sean Cope and Marta Almeida, DLA Piper Middle East LLP
6.11 Payment of Property Taxes There is no ‘real estate tax’ as such in the UAE; however, a municipality fee is payable by ten - ants. VAT is applicable to leases concerning com - mercial real estate at the standard rate of 5%, irrespective of whether the parties are UAE resi - dents. Landlords must make it clear whether the rent is inclusive or exclusive of VAT, and it is the responsibility of the landlord to pay any VAT to A landlord will typically pay for building insurance in a multi-let property, and a tenant will pay for its own contents insurance. A landlord operating a service charge will then recover the costs of the building insurance through the service charge. Under UAE federal law, there is automatic rent cesser following damage or destruction of the property. 6.13 Restrictions on the Use of Real Estate Leases normally specify the permitted use. If the lease is silent on this matter, the use should be consistent with zoning authorised for such property and the licensed activities of the tenant company. 6.14 Tenant’s Ability to Alter and Improve Real Estate Abu Dhabi and Dubai laws both require the ten - ant to obtain the consent of the landlord to all proposed works. The terms of a lease may also set out: the Federal Tax Authority. 6.12 Insurance Issues • what kinds of alteration or improvement works the tenant is permitted to carry out; • when the landlord’s consent should be sought for such works; and
• whether any types of works (eg, structural) are absolutely prohibited. Certain works require the consent of government authorities. In order to obtain such consent, these government authorities will require evi - dence of the landlord’s consent to such works. 6.15 Specific Regulations There is a maximum number of tenants who are permitted to occupy a single dwelling, which var - ies depending on the type and number of rooms in the dwelling. Two months’ notice for renewal or termination is required for residential leases. Commercial Commercial leases have similar rules to those applicable to residential leases, with minor exceptions. Three months’ notice for renewal or termination is required for commercial leases. Hotels/serviced apartments There are no specific provisions that apply to hotel leases. Leases of serviced apartments do not fall within the ambit of landlord and tenant legislation. Dubai The same laws currently apply to residential, industrial, office and retail leases. The excep - tion to this is accommodation provided by an employer to an employee. The DIFC Leasing Law 2020 draws a distinction between leases of commercial and residential premises, with enhanced protections afforded to tenants of residential premises. Abu Dhabi Residential
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