Tenancy Contract

A tenancy contract is the agreement under which a landlord permits a tenant to occupy property for a defined period and consideration. For a business, it may cover an office, shop, warehouse or other premises, and the signed document should identify the space, rent, dates, permitted use and responsibilities.

Local law and the actual terms determine how renewal, termination and disputes work. Start with the right parties and property: check the landlord's authority to lease and the tenant entity's exact legal name, since a trading name on a contract may differ from the entity applying for a licence.

Identify the unit number, area and any parking or storage rights, and if the tenant expects exclusive use of part of a building, the plan and description should make that clear. Rent is more than the headline annual amount, so review payment dates, deposit, service charges, utilities, taxes, fit-out costs and any escalation.

A rent-free period can improve cash flow but may be conditional on opening or completing works, so put every payment date in a cash forecast and distinguish refundable deposits from expense. An illustrative three-year lease with annual rent of $200,000 and three months free has a nominal rent total of $550,000 if the three months apply to the first year's rent and there are no escalations, which is about $183,333 per year.

This is a simple commercial average, not the accounting lease expense or liability under IFRS 16, and the timing and other charges can change the result. Permitted use is central for a commercial tenant, since a cafe may need food approvals and ventilation rights while an office may have restrictions on customer visits.

Verify that the property, building rules and licensing authority allow the intended activity before committing to fit-out, because a landlord's verbal assurance may not replace formal approval. Dubai Land Department provides an official service to register or renew an Ejari tenancy contract and a tenancy guide explaining the process, so a business with premises in Dubai should check whether and how its contract is registered, remembering that other emirates can have different systems and that the DLD service is not evidence that every property anywhere in the UAE uses Ejari.

Registration should match the signed terms, because an inaccurate start date, tenant name or rent on a certificate can complicate later licensing or utility work, so keep the contract and registration certificate together and check amendments. Do not assume the registration itself rewrites a private commercial clause, and correct any material discrepancy through the authority's process.

Renewal and notice clauses can create a deadline long before the lease expires, so record the date and delivery method of any notice of non-renewal or break, seek local advice where law sets mandatory rules, and remember that a reminder one week before expiry may be too late to change the outcome. Fit-out terms deserve a separate review: who approves drawings, pays for permits, owns improvements and restores the space at exit, bearing in mind that a rent-free fit-out period may be short compared with approvals and construction.

Check access, insurance and contractor requirements before signing, because a low rent can become expensive if the space cannot be made usable, and allocate maintenance and repairs clearly, since the landlord may handle structure and central systems while the tenant maintains internal equipment but the division varies. Record the condition at entry with photos and a defects list that helps separate ordinary wear from damage at exit, and do the whole review before investing in the premises, not after a licence or construction delay appears.