Dubai’s DIFC legislates new leasing law to protect property owners, tenants

The new laws will offer a regulatory environment in line with common legislations and onshore Dubai practices



Dubai International Financial Centre (DIFC), announced the enactment of a new leasing law to enhance its property market.

The legislation of DIFC’s new leasing law and regulations – enacted by Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai – aims to protect lessors/lessees entering into leases of properties based within DIFC’s ecosystem, as well as to offer a regulatory environment for international businesses to thrive, a statement said.

In light of DIFC’s status as an offshore jurisdiction within the UAE, the new leasing law will aim to offer a regulatory environment aligned with common legislations and onshore Dubai practices by offering the following:

  • Introducing general requirements for leases, and general obligations for lessees and lessors.
  • Introducing a tenancy deposit scheme for residential leases to be administered by the registrar of real property.
  • Requiring the production of condition reports in the format required by the leasing law by residential lessors.
  • Imposing a maximum limit on security deposits collected by residential lessors, and further provisions for residential leases.
  • Introducing clearer provisions pertinent to lease termination and disposal of goods and chattels remaining at the property following termination/liquidation of the lessee.

“Enacting the new DIFC Leasing Law will not only provide clearer guidance for thousands of landlords and tenants in the DIFC, but advancing our legislation also represents a key step for delivering on our landmark expansion plan that will transform the future of finance,” said Essa Kazim, governor, DIFC.

“We continue to level up our legal and regulatory framework and prioritise ease of doing business in the DIFC so that existing and prospective clients can operate with confidence within our strict legal parameters.”

The relevant consultation papers and legislative proposals can be accessed here.

In July 2019, DIFC Courts announced a change in will registrations to cover assets owned by residents and investors across the UAE and outside the country, effective July 1.

Read: Dubai’s DIFC Courts announces changes to will registration rules

In 2019, DIFC also introduced four new licencing categories – short-term and restricted licences, commercial permissions and dual licences – with reduced fees to attract more firms to do business in the centre.

Read more: Dubai’s DIFC introduces new licence categories with reduced fees

Meanwhile, the new insolvency law, enacted by the financial centre in Q2 2019, aimed to facilitate a more efficient and effective bankruptcy restructuring regime.

Read more: New insolvency law enacted by Dubai’s DIFC, lawyers say move will boost confidence