In Dubai Emirates, the registration of lease is governed by the Administrative Resolution No. (134) of 2013. This resolution was issued by the Dubai Land Department on 2nd April, 2014. Prior to the issuance of this resolution, there was no uniformity in the provisions relating to the lease registration in the Emirate. This resolution has cleared all the dust and ambiguity surrounding it.
Types of Lease in Dubai
As per the resolution, there are broadly two types of lease which are discussed below-
- Long term Lease
- Short term Lease
- Long term Lease –
It refers to that lease whose period is more than 10 years and up to 99 years. As per Article 9 of Dubai Law No. (7) of 2006, each and every long term lease shall be registered in the real property register of the Dubai Land Department. It is imperative to note that the tenancy laws don’t apply to long term leases and the Rental Dispute Settlement Centre doesn’t have any authority to adjudicate any disputes relating to long term leases.
Article 4 of the Dubai Real Property Law of 2007 stipulates that the citizens of UAE and GCC may enter into a long term lease agreement in all the regions of Dubai. A foreign citizen may also obtain a lease in a specified area subject to a condition that the maximum tenure of the lease would be 99 years.
The cost of registration of a long term lease is 4% of the entire rent amount. For the purpose of calculating cost, the rent amount includes total value of rent payable throughout the lease term along with any premium.
- Short term Lease
It refers to those leases which have a tenure of less than 10 years. As per Dubai Law No. 26 of 2007, all the short term leases must be registered with the Real Estate Regulation Authority. After the registration, an Ejari certificate is given which enables a tenant to open a Dubai Electronic and Water Account (DEWA) for the property.
The lease can be renewed after the completion of the term period. All the disputes arising from the short term leases are adjudicated by the Rent Dispute Settlement Centre.
The concept of Ejari
Ejari is a web based application which keeps a record of all the tenancy agreements of all kinds of properties in Dubai. This application is created by the Real Estate Regulation Authority (RERA). It is mandatory to get your property and land arrangements registered with Ejari.
Conclusion
With the advancement of technology, the registration of lease has become quite simple and straightforward in Dubai. There are mainly two types of Lease i.e., Long term and short term leases. All the long term leases are registered with the Dubai Land Department (DLD) whereas the short term leases are registered with the Real Estate Regulation Authority (RERA) and their details are kept in the Ejari application.