What you Should Know Before Signing Lease Agreement or Ejari in the UAE?

Now that we discussed various options for lease for your business, it is about the right time to share with you information on signing lease agreements. This won’t be a legal advice. Instead, we will provide you with structured practical information on how to rent properties, how to check your real estate brokers, which laws govern rental matters, where to go, should you have a dispute with your landlord and what rental of commercial property involves in general.

Regardless of the type of commercial property you require, the first question is where to search for the properties. As discussed in the previous chapters, you can start searching online, even if you are not in Dubai yet. Web-sites Dubizzle and PropertyFinder could be something you can initially rely on. Properties in the UAE are mostly rented through real estate brokers, although sometimes you can find ads, saying that property is advertised directly by the landlord. In the latter case, this may mean that you will be able to save on not paying real estate broker’s fees.

As soon as you found properties you like, you arrange for the viewings. Viewings allow you not only to assess the state of the property, but to check location, common areas of the property and learn more about available infrastructure. This all will help you to make a final decision, as to the option you would wish to proceed.

Negotiations is a very important part preceding lease agreement execution, which most of the time starts, as you view the property, and continues days after the viewing. You shall be aware of this cultural aspect and take it naturally, proposing to decrease the rent, as you will pay, say in one cheque for the whole year in advance. We already mentioned before that rental payments in the UAE are made mostly by bank cheques, the exception being when you pay rent for the whole year in advance by bank transfer or in cash. As such, if you are not prepared to pay for the whole year in advance, there is still room for discussions and you can agree that you would pay in two, three or four cheques.

Once you agree on the price and the terms and conditions of rent but before you sign lease agreement, there are several steps you should take first. First of all, you need to ensure that the real estate broker, if you are dealing with one, is registered and represents a legitimate real estate brokerage company, which obtained relevant license. To do this, request a broker to demonstrate his or her broker card, make a copy of the same and later search for the approved broker on the web-site of Dubai Land Department (if property is being rented in Dubai). Once confirmed, the next step would be to check that the real estate company, this broker represents, is a legitimate one. To do this, you shall visit the web-site of Dubai Department of Economic Development and on main page proceed to the section E-Services>Search Trade Name. Next you take the name of the company from the broker’s card, insert it in the box “English Trade Name”, type in verification code and press “Search”. If the company is registered, the license number will appear and you will be able to check, if the company renewed its license. In addition to these measures, you can also google the company and check the section “News”, to ensure that the company was not involved into any legal cases. Secondly, you need to make sure that you receive all documents of the property owner for your files. Ask a real estate broker to share with you a passport copy of the property owner, a resident visa copy, Emirates ID copy and a title deed copy of the property. Thirdly, make sure that all your payments are made to the property owner only, in other words in the name of the person mentioned on the title deed. In general, we recommend that you use reputable real estate agencies, especially, if you just start your journey in the UAE. Finally, feel free to negotiate additional terms of lease, which often come on a separate page. You may even want a lawyer to have a look at those, who will then suggest relevant amendments that can be then negotiated with the landlord and the real estate agency.

As soon as the terms and conditions are agreed on and the due diligence process is completed, you will proceed with signing of lease and payment. The payment will involve the following: payment to the real estate broker (brokerage fee) and security deposit payment as well as the payment for the first year of rent to the landlord. Sometimes, when there are no individual meters in the building, you may need to pay to the landlord a lump sum for the cooling charges, however, this shall be clearly mentioned in the lease agreement. Additionally, you will most probably need to cover the cost of registering your tenancy contract. Real estate broker will normally help you to get an Ejari registration certificate or Tawtheeq certificate, or register your lease with Municipality of the relevant emirate, however, you will bear the cost of lease registration, which is about several hundreds of UAE dirhams.

To ensure that you know your rights, you should know which laws govern relationships between the landlord and the tenant. You shall bear in mind that real estate legislation varies from emirate to emirate. All the laws are publicly available and you will be able to find them on the web-sites of land departments in the UAE, on the web-sites of real estate agencies, as well as in the public domain. We still encourage you to consult a legal professional, in case any disputes between you and the landlord arise.

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Disclaimer: Business Boutique UAE-Consultants.com is not affiliated with any particular government or legal entity. Business Boutique does not give professional legal advice nor any other professional advice subject to a public office in the government. This article merely sets out a simple and basic idea as to the reasons of Dubai freezone company setup and Dubai free zone company formation cost. Business Boutique in no way holds nor imposes any official governmental or legal authority and the article herein is only to be taken as a guide. All further governmental or legal issues should be addressed to the corresponding authorities.

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