Leasing in the UAE: Key legal insights for landlords and tenants

The leasing landscape in the United Arab Emirates is supported by a comprehensive legislative framework governs the relationship between landlords and tenants, demonstrates their rights and obligations, ensures market stability, and provides effective mechanism for dispute resolution.  

The UAE has established a robust legislative structure that regulates key aspects of leasing, including contract formation, rent payments, maintenance obligations, eviction procedures, and dispute resolution mechanisms. These matters are governed by the following legislations: Dubai Law No. 33 of 2008 Amending Certain Provisions of Law No. 26 of 2007 Regulating the Relationship between Landlords and Tenants in the Emirate of Dubai; Dubai Decree No. 26 of 2013 Establishing the Rental Disputes Center in the Emirate of Dubai; Dubai Decree No. 43 of 2013 Determining the Permissible Increase in Real Estate Rent in the Emirate of Dubai; Abu Dhabi Law No. 4 of 2010 on the Lease of Premises and Regulation of the Landlord-Tenant Relationship in the Emirate of Abu Dhabi; Sharjah Law No. 5 of 2024 Governing Relationship between Landlords and Tenants; Ajman Emiri Decree No. 2 of 2017 on the Issuance of the Real Estate Lease Law; RAK Law No. 8 of 2008 on Regulating the Relationship Between the Lessor and the Tenant; UAQ Law No. 2 of 2011 Regulating Landlord-Tenant Relationships in UAQ; and Fujairah Law No. 1 of 2011 on the Lease of Premises in the Emirate of Fujairah.

Together, these laws form the rental regulatory framework, promoting transparency, fairness, and legal certainty within the dynamic leasing market.

Lease arrangements in the UAE vary by type and location, with rules designed to suit residential, commercial, and free-zone properties. Residential lease is intended for daily living, typically granted for one-year renewable terms. Commercial lease defines permitted business activities, with terms usually ranging from three to five years for retail and office properties, and longer for industrial properties.

For a lease to be legally valid, it must clearly identify the parties involved, specify the leased property, and outline the terms and conditions governing the tenancy. Typically, a lease incorporates standard provisions, such as:

1. The tenant confirms inspection and acceptance of the property in its current condition.
2. The tenant shall use the property only for its designated purpose and may not assign, sublease, or transfer the lease without the landlord’s written consent, unless legally permitted.
3. No alterations or additions may be made without the landlord’s written approval.
4. The tenant is responsible for utility charges (electricity, water, cooling, gas) unless otherwise agreed in writing.
5. Rent must be paid in the agreed amount, method, and timeframe.
6. The landlord shall enable peaceful use of the property and is responsible for maintenance, unless otherwise agreed.
7. Any dispute arising from the lease shall be referred to the Rental Disputes Center.

Tenants are obligated to pay the rent as stipulated in the lease, and failure to do so constitutes a breach of the lease, which is one of the circumstances in which a lease may be terminated prior to its expiry. However, grounds for early termination may also include subleasing the property without the landlord’s prior consent; using the property for purposes that violate applicable laws or public order; introducing alterations or modifications to the property without the landlord’s approval; and where the property is at risk of collapse, provided that the landlord substantiates this with an official report issued by accredited experts. However, a property owner is not allowed to disconnect utilities in the event of breach, and the tenant may resort to the competent authority to remove the exposure and to be compensated for the damage suffered.

However, upon termination of the lease, the tenant is required to return the leased property to the landlord in the same condition in which it was received, subject to normal wear and tear. If the tenant made improvements to the property and the landlord elects to retain those improvements, the tenant may not remove them.

Further, throughout the lease term, landlords have a legal duty to keep the property in a habitable and safe condition. This includes maintaining the structural integrity of the building, ensuring essential systems such as plumbing, electrical, and heating or cooling are functional, and preventing any health hazards.

Although the exact responsibilities may vary depending on the lease agreement and applicable law, landlords are typically accountable for major repairs necessary to preserve the property’s safety and habitability. Article 16 of Dubai Decree No. 26 of 2007 Regulating the Relationship between Landlords and Tenants in the Emirate of Dubai stipulates “Unless otherwise agreed by the parties, the Landlord will, during the term of the Lease Contract, be responsible for the Real Property’ maintenance works and for repairing any defect or damage that may affect the Tenant’s intended use of the Real Property”. Therefore, the landlord is responsible for the maintenance works and repairs of any defects in respect of the leased property, which may affect the tenant’s intended use thereof, unless otherwise agreed between the lease parties.

In this context, the landlord may formally notify the tenant through a repair notice. This notice, typically issued in writing or via a notary, should outline the repairs needed, the expected completion timeline, and any specific instructions for the tenant to follow. Such formal communication ensures that maintenance issues are addressed efficiently and in accordance with the lease agreement. If the tenant fails to carry out the repairs within the stipulated period, the landlord may be entitled to pursue further action, including seeking appropriate legal remedies.

There are also urgent repairs which require immediate attention to prevent harm to occupants, further damage to the property, or significant inconvenience. Examples include a burst pipe, gas leak, water leakage, malfunctioning air conditioning in extreme weather, or electrical failures that pose safety hazards.

If a tenant identifies an urgent repair, they should promptly notify the landlord and provide clear details of the issue. If the landlord fails to respond in a timely manner, the tenant may pursue legal remedies to address the situation, such as sending a written notice and documenting the problem with photos or videos. In certain cases, tenants may be allowed to arrange for necessary repairs themselves and deduct the cost from their rent if the landlord does not act within a reasonable timeframe as stipulated in the lease agreement and applicable law.

It is worth highlighting that the issue of whether a lease may be transferred to a family member or occupant upon the death or departure of the original tenant is specifically addressed in Dubai Law No. 26 of 2007, in particular Article 27, which stipulates “The Lease Contract does not expire upon the death of the Landlord or the Tenant. The contractual relationship continues with the heirs, unless the heirs of the Tenant wish to terminate such relationship, provided that termination comes into effect no less than thirty (30) days from the date of notifying the Landlord of such intent or the expiry date of the Lease Contract, whichever comes first.”

Another important issue in property rentals is nuisance, which refers to actions or conditions that disrupt a person’s use and enjoyment of their property, causing inconvenience, annoyance, or harm. Examples include excessive noise, property damage, illegal activities, or conduct that violates the terms of the lease. If a tenant’s behaviour or use of the property significantly interferes with the rights of the lessor or other tenants, it may be deemed a nuisance.

Situations that could constitute a nuisance include ongoing or excessive noise that disturbs neighbours’ quiet enjoyment; strong, unpleasant odours affecting nearby properties; activities that cause air or water pollution, potentially endangering health; and neglecting property maintenance, resulting in unsanitary conditions or health risks for neighbours. However, a tenant whose actions create a nuisance affecting the lessor or other tenants may be in breach of the lease and subject to legal action. Equally, if a lessor fails to remedy conditions causing a nuisance, tenants may have the right to seek remedies or take legal action.

The tenant has a fundamental right to the peaceful enjoyment of the leased property and to the privacy of the premises. Nevertheless, there are circumstances where the landlord may need to access the unit, including emergencies, routine inspections, necessary maintenance, or showing the property to prospective tenants. Under UAE law, the landlord must obtain the tenant’s prior consent before entering the property, except in urgent situations where immediate access is required.

A tenant’s rights upon a landlord’s entry depend on whether the access is lawful or unauthorized. If the landlord enters legally and causes damage, the tenant may claim compensation. Nevertheless, if the entry is unauthorized and results in damage, the tenant may file a criminal complaint and pursue a civil claim for compensation.

It is worth also noting that, according to the laws and regulations of the Emirate of Dubai, payments commonly referred to as “key money” or “goodwill payments” are not allowed. The regulations governing the landlord-tenant relationship prohibit any payment from a prospective tenant to an existing tenant as an inducement to vacate the premises. Instead, tenants are required to fulfil legitimate financial obligations, such as advance payments, which form part of the contractual rental amount specified in the lease agreement.

However, a deposit may be required to secure the leased property. This deposit is paid once landlord and tenant have reached a mutual agreement, even if the formal lease contract has not yet been executed. It is generally agreed that if the tenant fails to appear for the contract signing and consequently breaches the tenancy commitment, the deposit will be retained and considered non-refundable.

It is also important to point out that if a tenant vacates the leased property without returning the key, the landlord may approach the Rental Disputes Center to recover outstanding rent and request that the property be handed over unencumbered. The landlord may also claim rent up to the date the property is effectively vacated. Before filing such a claim, the landlord must issue a 30-day formal notice instructing the tenant to vacate, surrender the key, and settle any pending payments.

If the tenant provides the key or the landlord takes possession, and only unpaid rent remains, the landlord may still file a claim for the outstanding amount with the Rental Disputes Center. This can result in a payment order or enforcement action under the Civil Procedure Law. A tenant facing difficulty in paying outstanding rent may file petition with the Center to demonstrate financial hardship and request an instalment plan until their financial situation improves.

Further, it is important to note that when a tenant leaves their belongings in the leased property without officially ending the lease, or fails to vacate while carrying unpaid rent, the landlord is legally entitled to seek a court order for eviction or repossession. In such cases, the landlord may also invoke “enforcement seizure” over the abandoned possessions. The seized items are assessed by the competent authorities, and their evaluated value is deducted from the tenant’s outstanding rental obligations.

In conclusion, leasing property in the UAE is governed by a clear legal framework that balances rights and responsibilities of landlords and tenants, covering habitability, privacy, financial obligations, and resolution of disputes to protect all parties involved. Understanding these rules ensures a fair, transparent, and secure tenancy, helping prevent conflicts and maintain a smooth rental experience.

For more information on our lease legal services, please contact Manish Narayan, Partner, and Essa Ziad Galadari, Advocate.