A Guide to Renewing Commercial Lease in the UAE

When it is time to renew a commercial lease in the UAE, most people get intimidated by the prospects and procedures they have to undergo to make the process successful. But with proper guidance, you will be able to seamlessly execute it without any hassle. So, if you are someone whose contract for business tenancy or commercial lease is awaiting a renewal in the near future, this is the space you need to follow.

Without the proper knowledge of how to deal with the mechanism, commercial leasing can appear as a complex process. You need to put in careful consideration and focus on attention to detail to avoid errors and mishaps. It doesn’t matter if you already have a successful business that is on the verge of expansion or a start-up looking forward to spreading its wings for the first office space, commercial leasing is paramount to your business.

We are going to assist you in becoming aware of all the steps you need to go through to make sure the renewal of your commercial lease in the UAE takes place smoothly. Follow along with the chronological steps that we have put together that will give you valuable insights into the process.

Steps to Renew a Commercial Lease in the UAE

The Government of the UAE has made the renewal process of commercial leases pretty straightforward. As long as you are following the legal protocols and meeting the desired requirements, you will not face any trouble in renewing the concerned commercial lease.

If you are moving to Dubai with family or anywhere in the UAE and thinking of starting or expanding your business, being aware of the protocol to renew a commercial lease is crucial. By maintaining the following steps, you will be able to ensure that your business is running smoothly.

Thoroughly Reading the Terms of Your Current Lease

First and foremost, you need to thoroughly read and understand the terms of your current lease. This will serve as the base for you to move forward. You need to acclimatize yourself to the conditions, deadlines, and clauses mentioned in your current agreement before you start the process of the renewal.

Most commercial leases require an increase in rent upon renewal. So, you need to be prepared if there is a similar clause in yours as well. You also need to check out the notice period as it will inform you about the time you need to notify your landlord about the renewal. It can complicate the process further if you miss the deadline.

Finally, you also need to check and find out who is responsible for the maintenance of which aspect. It will help you in managing the expenses of your business and with your overall budgeting. Understanding the current lease terms will ensure that you are not going to face any surprises during the renewal process.

Proactively Negotiating the Terms of Renewal

Practicing the power of negotiation is crucial if you want to protect your money. However, it is a heavily subjective aspect as it depends on landlords to landlords. Some may be open to the idea of lowering the rent amount if you can commit to a longer period of lease. So, suit yourself accordingly.

You need to also do some market research and find out if the rent prices in your area have dropped. If it has, then use this piece of information to proactively negotiate with your landlord. Moreover, if there are any pertinent issues involving the maintenance of the property, this is the right time to bring it up with your landlord and make requests.

Please note that negotiation doesn’t have to result in a battle. It means to have a fair play for both the parties depending on the current situation.

Seeking Necessary Approvals for Your Lease

The next phase of the renewal process requires you to gather the necessary approval from various authorities. In order to make sure the renewal of your commercial lease gets the green light, you need to ensure you get certain approvals.

For instance, if you are in a business that deals with food and beverages, then you need to obtain approval from the Dubai municipality board. This requires the submission of an online request. Make sure your landlord is on board with the renewal process, especially in the event of any changes in your business activity.

When you are incorporating any major changes to your business, you might have to get special approvals before finalizing the renewal of your commercial lease. You need to submit the new activity details to the concerned authority to make sure there are no future hiccups in the renewal process.

Checking in the Renewal Process with the Official Authorities

Once you have all the documents ready and obtain the necessary approvals, it is time for you to begin the official renewal procedure with the authorities. First of all, you have to submit the documents of lease renewal through the apt channels. It is generally done online through the Dubai Land Department (DLD).

Follow this up with the payment of the renewal fees. It will vary from property to property, mainly depending on its size and type. Once you have completed the submission process, you will get a confirmation of the same. This will serve as the proof of renewal of your commercial lease.

Usually, you get the renewal confirmation receipt within 3-5 days of submission of the documents. Remember, the entire process will get streamlined if you follow the protocol and maintain the steps mentioned appropriately.

Documents Needed for Renewing a Commercial

To make sure you are following the legal parameters of the process, you need to gather all the required documents needed for renewing a commercial lease in the UAE. This way, you will be able to avoid any last-minute hurdles. Keep in handy the following set of documents.

• A copy of the Emirates ID and passport
• A valid trade license copy
• A copy of the current lease agreement
• A No Objection Certificate (NOC) from the landlord (Optional)

Things to Remember

While renewing your commercial lease, you might face certain challenges. This includes an unexpected increase in the rent. If the rate is higher than anticipated, make sure to research the market rates and negotiate accordingly to settle on fair pricing.

You might face some delays in obtaining approvals. This is why, it is suggested to start the renewal process with a bit of time in hand. Doing so will make sure that you won’t miss the deadline and you don’t have to deal with any last-minute stress.

If you find yourself in a dispute with the landlord, it is recommended to mediate through the Dubai Rental Dispute Settlement Center (RDSC) and seek legal advice. Be polite but maintain firmness and assertiveness while negotiating and communicating with your landlord.

To Conclude

Renewal of commercial licensing is not just about getting a sign on the dotted line. It is about meticulously understanding the contract, ensuring you have the necessary approvals to continue your commercial venture, and being proactive in negotiating terms that are feasible for you.

With the right approach, you can manage the renewal process effortlessly. All you need to do is stay informed, be prepared, and maintain organization. Keep an open line of communication with your landlord and proceed accordingly.

FAQs

Commonly Asked Questions about Commercial Lease Renewal

What documents are needed to renew a commercial tenancy in Dubai?

To renew a commercial tenancy in Dubai, you need to have a copy of your Emirates ID, a valid trade license, and your current lease agreement. In some situations, you may even have to present a No Objection Certificate (NOC) from the landlord.

What approvals are required for lease renewal in Dubai?

To get a commercial lease renewal in Dubai, you may have to obtain several types of approvals. This includes the consent of the landlord, and in certain situations, the approval of the Dubai municipality board. In the event you are changing your business activity, you may have to get some additional approvals that would depend on the nature of your business.

Can a landlord refuse to renew a lease in Dubai?

Yes, a landlord can refuse to renew a lease in Dubai. But, they must have a valid reason to do so and must follow all the legal procedures accordingly. If they don’t provide the tenant with a valid reason, then the tenant can file a complaint with the Rental Dispute Center (RDC). In addition, the tenant can be eligible for compensation if there is any breach of contract.

How can I negotiate better terms for my lease renewal?

In order to negotiate better terms for your commercial lease renewal, you need to be aware of the market dynamics. Research the current market rates and mention any maintenance issues, if there are any. You can even ask for a lower rent by committing to an extended period of lease. Mostly, maintain a clear line of communication, be polite, and stay informed.