Commercial leases in Dubai: offices, shops and warehouses

1.Before you commit

The cost of a commercial lease extends beyond annual rent. Fit-out, activity approvals, repairs, additional charges and exit conditions can affect the business’s return. Before paying or starting work, establish whether the premises can be used for your activity and who bears each cost. This guide concerns leases under Dubai’s general tenancy framework. DIFC premises and other special arrangements require a separate check of the applicable rules and dispute forum.

2.Check permitted use before committing

Describing premises as an office or shop does not establish that your particular activity is permitted. Match the proposed business to land use, licensing, safety and building-approval requirements. For a warehouse, check the permitted goods, power capacity, loading access and operational restrictions.

Verify ownership and the signatory’s authority, and identify the correct tenant. Signing personally before the operating company exists can complicate liability and a later transfer. If an essential approval is outstanding, negotiate a deadline and express termination or refund terms if it is refused. Ejari registration does not itself authorise every business activity.

3.Document handover and fit-out obligations

Record the premises’ condition, equipment, services and existing defects, supported by photographs. Specify handover, rent commencement, any agreed rent-free fit-out period and approvals needed for alterations. Under the applicable tenancy law, maintenance is generally the landlord’s responsibility unless otherwise agreed. The contractual allocation therefore matters.

Explain how delays in approvals or fit-out affect rent, and what must be removed or reinstated at the end. Spending money on improvements does not automatically entitle the tenant to reimbursement from the landlord.

4.Review the full payment and renewal terms

List base rent, deposit, service charges, cooling, parking, insurance and any applicable tax. Establish the basis for variable charges and deposit deductions and repayment. Leases governed by the tenancy law must be registered with RERA, ordinarily through Ejari.

For proposed changes to terms at renewal, the statutory notice period is at least 90 days before expiry unless the parties agree otherwise. Giving notice does not itself make every rent increase permissible. Notice to amend renewal terms should also be distinguished from an eviction notice: eviction has its own grounds and procedures.

5.Plan for an early exit or business sale

Do not assume every commercial tenant has a right to leave by paying a standard penalty. Review any early-termination clause, notice deadline, exit payment and settlement process. If a business sale or subletting is foreseeable, establish required consents and transfer conditions at the outset. Both the contractual terms and the applicable rules on assigning use or subletting need review.

6.Hypothetical example

A company pays to fit out a shop, but a necessary approval for its proposed activity is refused. Without suitable conditions governing approval and rent commencement, being unable to open does not necessarily suspend its rent obligations.

7.Documents to prepare

• The draft lease and every addendum.
• Ownership, representation and proposed tenant documents.
• The activity description and required approvals.
• The full cost schedule, fit-out programme and handover condition record.

8.Your next step

Dr. Bahrami’s office can be contacted to review these documents before signing.