7 Key Clauses to Include When You Draft a Lease Agreement for Commercial Real Estate in the UAE

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Introduction: Why Lease Agreements in the UAE Need Precision

To draft a lease agreement in the UAE—especially for commercial real estate—is to walk a legal tightrope. For first-time tenants or businesses expanding into Dubai or Abu Dhabi, unclear lease terms can lead to costly misunderstandings, operational interruptions, or even litigation.

This post will help you draft a lease agreement that stands up to UAE commercial law. Below are seven essential clauses every lease should include, plus legal context, practical guidance, and common pitfalls.

Who This Is For / Why This List Matters

This guide is for:

Business owners leasing commercial space in the UAE
Landlords and developers preparing lease terms
Legal professionals who draft a lease agreement for clients
Brokers helping clients avoid future disputes

Use this list when you draft a lease agreement, negotiate terms, or revise an existing contract.

1. Define the Premises Clearly When You Draft a Lease Agreement

When you draft a lease agreement, the first priority is describing the premises. Generic references like “office space on the third floor” are inadequate.

What to include:

Unit number, square meters (usable vs total), parking rights, and shared areas
Floor plans in an annex
Exclusion of any non-leased areas

This is especially important in UAE towers or free zones, where misunderstandings about space use are common.

2. Spell Out Rent, Payment Schedules, and Service Charges

A well-structured rent clause is vital when you draft a lease agreement in the UAE. Tenants are often surprised by hidden charges.

Clarify:

Base rent and how it’s paid (e.g., quarterly cheques)
Who pays for service charges, utilities, and VAT
Penalties for late payments

Never assume rent terms are standard across UAE zones or landlords.

3. Include Fit-Out Conditions When You Draft a Lease Agreement

Disputes about fit-outs are frequent—especially in shell-and-core spaces. When you draft a lease agreement, specify:

The exact handover condition
Fit-out approval requirements (e.g., Trakhees, TECOM)
Time limits and access rights

Make sure tenant obligations and landlord deliverables are clearly separated.

4. Clarify Maintenance Responsibilities

Drafting a lease agreement without a clear maintenance clause is risky. In shared commercial buildings, unclear maintenance rules can create unexpected costs.

Split responsibilities:

Landlord: Building shell, façade, elevators
Tenant: Fixtures, interiors, minor repairs

Also include emergency repair processes and standards of care.

5. Add Renewal and Termination Terms When You Draft a Lease Agreement

When you draft a lease agreement in the UAE, termination rights should never be an afterthought. Include:

Renewal timelines and rent review rules
Early exit clauses and agreed penalties
Conditions for mutual or unilateral termination

Many tenants overlook this—until it’s too late.

6. Protect Use Rights and Regulatory Compliance

Use clauses are especially important in UAE zones with strict business licensing.

Make sure your lease includes:

Specific permitted activities
Requirement for valid licenses
No subletting or changes without consent

When you draft a lease agreement, confirm it reflects all local compliance obligations.

7. Add Dispute Resolution and Jurisdiction Clauses

To avoid jurisdictional confusion, always add a dispute clause when you draft a lease agreement in the UAE.

Include:

Governing law (e.g., UAE Civil Code)
Forum (e.g., Dubai Courts or ADGM Arbitration)
Free zone-specific requirements

Without this, simple disputes can escalate or end up in the wrong court.

Mini Case Example: Why Drafting Matters

A logistics company in Dubai nearly signed a boilerplate lease that failed to specify maintenance obligations. Their lawyer caught it and helped draft a lease agreement that included maintenance, early exit, and refund rights. Three months later, that clause saved them thousands when the landlord terminated early.

Summary Checklist: How to Draft a Lease Agreement in the UAE

Describe leased space with detail and attachments
List rent terms, payment timing, and charges
Define fit-out scope, timeline, and approvals
Clarify maintenance by role
Include renewal, break, and penalty clauses
Address permitted use and local legal compliance
Set clear dispute resolution and jurisdiction clauses

Final Thoughts

In the UAE’s complex commercial market, don’t rely on templates. When you draft a lease agreement, tailor it to the property, the zone, and the business model involved.

Need help to draft a lease agreement for a UAE property?
Book a consultation or download our free commercial lease checklist today.

How to Draft a Lease Agreement for Commercial Real Estate in the UAE