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Leasing Property in Dubai

Leasing or renting residential and commercial properties to tenants for fixed time period is the common practice across the world. Local residents and migrants equally apply to get a property on lease to fulfill their accommodation and business needs. In real estate market of Dubai leasing and renting is a common practice because everyone does not afford to own a house or commercial asset. Moreover, foreigners are not allowed to possess free hold properties across UAE. Only, specific areas allow expats to possess a legal ownership of an asset.

Major Difference between Property Leasing and Renting

Common people may think that leasing and renting both are same but in actual they are different from each other. The major difference between leasing and renting is its duration and renewal process. Properties are usually rent for shorter time period that is for few weeks, months or a year. The rental agreement automatically renew at the end of month. While in case of asset leasing the duration of lease is much longer and can be extended to 99 years even. Property lease does not renew automatically rather land lords and tenants have to follow proper legal process for lease renewal.

Types of Residential Property Leasing in Dubai

Residential property leasing in Dubai is a type of legal agreement between an asset owner and a renter or lessee. This document issues an approval for tenants that allow them to use asset as an accommodation place. There are three major types of residential property leasing in Dubai.

  • Fixed Term Lease
  • Periodic Lease
  • Holdover Lease

Fixed Term Lease

It is a most common type of lease available in UAE. It allows renters to stay in a house for fixed time period with predefined start and ending dates. This type of lease can last for range of duration starts from 3 months to 10 years even. This duration mainly depends on the needs of tenant and landlords.

Periodic Lease

Month-to-month lease is an alternative name for Periodic lease that extends for 30 days. Landlords allow tenants to stay in home for a month only. Mostly holidaymakers prefer to get this type of lease to spend their summer vacations. Other issues of rent payment, lessee and landlords are similar like other types of lease.

Holdover Lease

Holdover lease evolve after the expiration of fixed term lease of an estate. Initially there is no written documentation for this lease. Document only created if tenant continue to live in the unit and landlord don’t take any step to free his space. Home owner is allowed to dismiss tenant from his unit after expiry of original lease. Normally tenant has 24 to 48 hours to move from leased unit.

Types of Commercial Property Leasing in Dubai

Commercial property leasing in Dubai requires a specific legal document that is equally beneficial for tenant and landlords. It is not just a simple process like residential lease. Following are four major types of commercial property leasing in Dubai.

  • Gross Lease
  • Triple-Net-Lease
  • Land Lease
  • Modified Net Lease

Gross Lease

It is general lease include full services. Tenant has to pay fixed amount as rent where as landlord will pay other charges like property maintenance, tax and insurance charges. Mostly single and multi story office buildings offer this kind of lease for tenants.


Tenant will have to pay a considerable amount of other asset related expenses like tax, maintenance charges and insurance along with property rent. Commonly tenants do not prefer such kind of lease as it put extra burden on tenant. But it is very common practice in commercial property leasing as it is very beneficial for landlords. The only drawback of this lease is that the rents are lower as compared to other lease types.

Land Lease

Land lease is usually issued for longer period of time. Landlord offer land on rent and tenant is allowed to construct building on it. And at the end of lease owner get land plus building.

Modified Net Lease

This type of lease exists between gross lease and triple net lease. It is very beneficial for landlords and tenants. Tenants and owners share all the property related charges like taxes, maintenance and insurance. Mostly industrial properties, retail or multi tenant properties are leased this way.

Future Prospects Leasing Property in Dubai

Leasing property in Dubai is a bright opportunity for real estate investors. As we know Dubai property market is considered as a tenant friendly market, still it offers high earning opportunities to investors. There is not enough supply of rental properties to satisfy all tenants looking for rental properties for their accommodation and business setup. Searching suitable place for rent can be very difficult and tiring process for tenants. Specifically for expats who are visiting Dubai to setup their business or to find a job. Only a reputable and reliable real estate consulting firm like Better Homes LLC can help you to resolve your business and accommodation needs. During the year 2002, a significant rise in asset rent was observed that puts pressure on tenants. In order to release some of the pressure city Government enforced 7% rental cap in year 2007. This is very helpful for existing tenant. This rental cap allowed tenants to file a complaint against landlords who are raising rents more than 7%. It also helps to limit gratuitous hikes in asset rents. Moreover, this regulation also allowed landlords to increase their property rents to a certain limit at once, instead of a slow and gradual increase in rents.

The major reason of rental property shortage is a significant increase in population of this city. As more and more expats are considering this city to find better job and business opportunities. It is the rule of economics that reduced product supply resulted in high product price. Besides all these facts, the future prospects of leasing property in Dubai are good. Developers are investing more to buildup better and bigger building and complexes to execute needs of tenants and real estate investors. Such steps provide relief to current tenants leasing a Dubai property.

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