Option To Renew Tenancy Agreement

Option To Renew Tenancy Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

I need an Option to Renew Tenancy Agreement for my retail space in Dubai Mall, with a 3-year renewal option starting March 2025, including provisions for annual rent increases based on RERA calculator and requirements for Ejari registration.

Document background

The Option To Renew Tenancy Agreement is essential in the UAE real estate market where both landlords and tenants seek long-term security in their rental relationships. This document is typically used when parties want to establish clear renewal rights and obligations beyond the initial lease term, while ensuring compliance with UAE Federal Law and emirate-specific regulations. It becomes particularly relevant in commercial leases where tenants make significant investments in the property, or in residential contexts where tenants seek housing security. The agreement must align with local rent increase calculators, registration requirements (Ejari in Dubai, Tawtheeq in Abu Dhabi), and specified notice periods. It includes detailed provisions for exercise mechanics, renewal terms, rent determination, and conditions precedent, providing a comprehensive framework for lease renewal.

Suggested Sections

1. Parties: Identifies the landlord and tenant with their full legal names, addresses, and relevant registration details

2. Background: States the existence of the current tenancy agreement, its key terms, and the parties' intention to establish an option to renew

3. Definitions: Defines key terms used throughout the agreement, including 'Option Period', 'Exercise Notice', 'Renewal Term', and 'Current Rent'

4. Grant of Option: Specifies the landlord's grant of the option to renew and its basic terms

5. Option Period: Defines the timeframe during which the tenant may exercise the option to renew

6. Exercise of Option: Details the process and requirements for exercising the option, including notice requirements and formalities

7. Renewal Terms: Specifies the terms that will apply during the renewal period, including duration and any modifications to existing terms

8. Rent for Renewal Period: States the rent for the renewal period or the mechanism for determining it, complying with UAE rent increase regulations

9. Conditions Precedent: Lists conditions that must be satisfied before the option can be exercised (e.g., no existing defaults)

10. Governing Law and Jurisdiction: Specifies UAE law as governing law and establishes jurisdiction for dispute resolution

Optional Sections

1. Registration Requirements: Details requirements for registering the renewal in Ejari/Tawtheeq systems, included when the property is in Dubai or Abu Dhabi

2. Multiple Renewal Options: Included when multiple successive renewal options are being granted

3. Rent Review Mechanism: Detailed provisions for rent review during renewal, included when rent isn't fixed in advance

4. Security Deposit Adjustment: Provisions for adjusting security deposit upon renewal, included when changes to deposit are contemplated

5. Maintenance Obligations: Specific maintenance terms for renewal period, included when these differ from current terms

6. Break Clause: Optional termination rights during renewal period, included when early termination might be needed

7. Guarantor Provisions: Included when there is a guarantor whose obligations need to extend to renewal period

Suggested Schedules

1. Schedule 1 - Property Details: Detailed description of the property including location, size, and any included fixtures/fittings

2. Schedule 2 - Current Lease Terms: Summary of key terms from the existing lease that will continue during renewal

3. Schedule 3 - Rent Calculation Formula: Details of how rent increases will be calculated, incorporating UAE rent calculator requirements

4. Appendix A - Form of Exercise Notice: Template notice for exercising the renewal option

5. Appendix B - Condition Report: Current condition of the property as baseline for renewal period

6. Appendix C - Required Maintenance Schedule: Schedule of maintenance obligations during renewal period

Authors

Alex Denne

Head of Growth (Open Source Law) @ ��Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Real Estate

Commercial Property

Residential Property

Retail

Hospitality

Industrial

Office Space

Mixed-Use Development

Shopping Centers

Warehousing

Education

Relevant Teams

Legal

Real Estate

Property Management

Operations

Facilities Management

Asset Management

Compliance

Contract Administration

Tenant Relations

Property Administration

Relevant Roles

Property Manager

Real Estate Manager

Facilities Manager

Legal Counsel

Leasing Manager

Asset Manager

Commercial Director

Operations Manager

Tenant Relations Manager

Real Estate Agent

Property Administrator

Compliance Officer

Contract Manager

Real Estate Portfolio Manager

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