Tenancy contract in Dubai and the UAE

Learn why tenancy contracts are essential for tenants and landlords in the UAE, and about the registration, renewal, and cancellation of these contracts.

What is a tenancy contract?

A tenancy contract is a legally binding rental agreement that allows the tenant to use a property for a specific purpose over a certain period of time, in return for a specific consideration (aka rent). This document outlines the relationship between the landlord and the tenant. The tenancy contract should cover the terms of the lease (including governing laws), as well as the obligations of both the landlord and the tenant. It should be comprehensive and allow no room for uncertainty. 

These contracts are an integral part of regulating the property rental market as they help prevent misunderstandings and provide clarity in the face of disputes. Each Emirate in the UAE has its own body that registers and regulates tenancy contracts. These regulatory bodies also set the requirements for landlords, tenants, buyers, investors, sellers, property developers, real estate agents, and more. 

Tenancy contract form in Dubai and the UAE

The tenancy contract form must contain the following information: 

• Landlord’s (or property owner’s) information and contact

• Tenant’s information and contact

• Property usage, type, and size

• Property location - address, building name, property plot number

• Dubai Electricity and Water Authority (DEWA) premise number

• Contract period / duration of lease

• Rental price and payment method

• Security deposit amount

• Contract value

• Terms and conditions

• Additional addendum for special conditions (eg. the payment of services, situations requiring a No Objection Certificate (NOC), the extent of property maintenance by tenant)

The contract must be signed (as applicable) by the landlord, the tenant, the legal representative of the landlord with a Power of Attorney, and the licensed property management company. This must take place in the presence of a notary official. 

Below is the first page of the Unified Tenancy Contract from the Dubai Land Department (DLD). This form provides the standard format for tenancy contracts in Dubai and can be used by tenants and landlords for writing up their tenancy contract. 

Tenancy contract registration and fees in the UAE

All tenancy contracts and amendments (if any) must be registered by the regulating authority of the Emirate where the property is located. Registration is necessary to connect utility services such as water, electricity, gas, and telecommunications services. It also ensures that the property isn’t rented to more than one tenant. A tenancy contract is only legally binding once it is registered, meaning that the government authorities will only intervene in the case of contract breaches if it is registered. 

Dubai tenancy contract

The Real Estate Regulatory Agency (RERA), a regulatory arm of the Dubai Land Department (DLD), sets the requirements for the Dubai real estate market. RERA is in charge of registering and regulating lease agreements through the Ejari system. After your contract is registered, tenants must pay a Dubai Municipality housing fee of 5% of the yearly rent, added to monthly electricity and water bills. The tenant often ends up completing Ejari registration on their own in Dubai. Learn all about how to complete Ejari registration, the associated fees, Ejari registration centers in Dubai, and more.
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Abu Dhabi tenancy contract

In Abu Dhabi, the tenancy contract must be registered in the Tawtheeq system. This registration has a housing fee of 3% of the annual rent, added to the monthly water and electricity bill to be paid equally across 12 months. The landlord or property manager must complete Tawtheeq registration. 
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Sharjah municipality tenancy contract

The tenancy contract must be registered with the Rental Regulation Department in Sharjah. The Sharjah municipality charges 4% of the annual rent. Lease attestation (contract registration) and renewal of tenancy contracts can now be completed online.
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Ajman tenancy contract

In Ajman, the tenancy contract must be registered in the Tasdeeq system. The municipality fee is 2% of the lease value, with a minimum fee of AED 400. The landlord is responsible for completing Tasdeeq registration. 
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Umm Al Quwain (UAQ) tenancy contract

The Umm Al Quwain municipality is in charge of Issuing Certified Lease Contracts. The fees include 2% of the rent contract value plus a service charge of AED 40. This process must be completed in person (as there is no online service) and submitted between 7:30 am and 12:45 pm.
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Ras Al Khaimah (RAK) tenancy contract

The RAK municipality provides the service of Tenancy Contract Registration. The fees are AED 25 and 5% of the lease contract value. The entire registration process can now be completed online.
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Fujairah tenancy contract

The Fujairah municipality has the Ejaar system for use by tenants, property owners, and property managers. The tenancy contract registration process can be completed online. If the annual rent is less than AED 15,000, the registration fee is AED 300. For rent that is above AED 15,000, the registration fee is 2% of the total rental value.
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Tenancy contract renewal and cancellation in the UAE

The landlord and tenant can amend the terms of the contract and rental amount prior to the expiration of the contract. Either party must notify the other at least 90 days before the contract expires in order to agree upon any changes before contract renewal. The tenant must also notify the landlord at least 90 days before expiration if they do not wish to renew their lease.  

‍The tenant has the right to automatic renewal of the tenancy contract for another lease duration (ie. the same length as the current lease) or 1 year, whichever is less. The landlord or tenant will still need to apply for contract renewal via the Emirate authority, upon which they will issue a receipt acknowledging the renewal. There will also be certain fees for contract renewal that the landlord or tenant must pay. 

According to DLD regulations, once the current contract expires, the landlord can only request eviction of the tenant under one of the following circumstances: 

• If the owner wants to demolish or do construction that will prevent the tenant from living in the property (provided the required permits are obtained).

• If the property requires restoration or maintenance (verified by a technical report) that can’t be done while the tenant is living in the property.

• If the owner wants to take possession of the property for personal use or use by his first-degree relatives.

• If the owner wants to sell the property.

In the event of any of these cases, the landlord must notify the tenant 12 months prior to the eviction date. Of course, there are also other cases where the landlord can seek to evict the tenant sooner or during the contract period given certain events such as failure to pay rent, damage to the property, or another serious breach of contract. 

There are no guidelines in place for early termination of the contract by the tenant. If you anticipate wanting to end the lease early, you should be sure to write an amendment or an exit clause into the tenancy contract that lays out the time frame for notification and fees associated with early termination. Otherwise, the landlord has the right to ask for compensation, which could be as much as the full remaining rent amount. Typically, the tenant should give at least 60 days' notice if they wish to end the contract early.  

Next steps

Having a comprehensive tenancy contract helps you and your landlord get on the same page from the very beginning of your lease. Once you’ve registered your tenancy contract with the appropriate Emirate municipality, you can rest assured that your rights as a tenant or a landlord are protected.

As a landlord or property investor in the UAE, you might want to read up on short-term vs long-term rentals and rental yield optimization. Renters should check out our blog about manager’s cheques to learn more about rental payments in the UAE. 

If you’re planning on living in the UAE for a longer period of time, you might consider buying a property as it can be a great long-term investment. At Kredium, we can help you find your dream property in Dubai and help you get personalized financing for your purchase via a mortgage loan or an Islamic financing option. Check out our mortgage calculator to estimate your monthly mortgage payments – you may find that it’s not that much more expensive than making monthly rental payments. Get in touch with our professionals at Kredium by contacting us or registering on our website. 

Photo Credits: 

• Photo by freepik

• Photo of pdf from Dubai Land Department