Attornment And Non Disturbance Agreement Template for the United Arab Emirates
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What is a Attornment And Non Disturbance Agreement?
The Attornment And Non Disturbance Agreement is a crucial document in UAE real estate financing transactions where a property is both mortgaged and leased. It becomes necessary when a lender holds or will hold a security interest in a property that is or will be leased to tenants. The agreement serves multiple purposes: it protects the tenant's right to continue occupying the property even if the lender forecloses, ensures the lender's security interest is protected, and establishes the tenant's obligation to recognize the lender as the new landlord in case of foreclosure. Under UAE law, this agreement must comply with both federal and emirate-specific regulations, including the UAE Civil Code and relevant property laws. It's particularly important in commercial real estate transactions where long-term tenancy arrangements need to coexist with property financing structures.
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About the Attornment And Non Disturbance Agreement
An Attornment And Non Disturbance Agreement is a three-party contract that balances the interests of landlords, tenants, and lenders in UAE property transactions. You'll need this document when a property is both mortgaged to a lender and leased to tenants, creating potential conflicts between tenant occupancy rights and lender security interests.
When do you need this document?
You require this agreement in several commercial real estate scenarios. If you're a tenant entering a long-term lease on a mortgaged property, this document protects your right to remain in occupation even if the lender forecloses. Property owners seeking financing for leased buildings must provide this agreement to satisfy lender requirements for clear title and tenant cooperation. Lenders financing income-producing properties demand these agreements to ensure rental income continuity and tenant cooperation during potential enforcement proceedings. Real estate developers with pre-leased properties need this documentation before securing construction or permanent financing.
Key legal considerations
The attornment clause requires you as a tenant to recognize the lender as your new landlord if they enforce their security interest, maintaining your lease obligations under new ownership. The non-disturbance provision protects your tenancy rights by preventing the lender from terminating your lease solely due to foreclosure, provided you comply with lease terms. Subordination clauses establish that the lender's security interest takes priority over your lease rights, but this is balanced by non-disturbance protections. You must carefully review notice provisions that specify how parties communicate during default and foreclosure scenarios. The agreement should clearly define what constitutes tenant compliance and under what circumstances the lender can terminate tenancies. Consider including provisions for security deposit transfers and maintenance obligations during ownership transitions.
Legal requirements in United Arab Emirates
Under UAE federal law, these agreements must comply with the UAE Civil Code's contract formation and property rights provisions, ensuring all parties have legal capacity and the agreement serves legitimate commercial purposes. The UAE Commercial Transactions Law governs commercial aspects of these tri-party arrangements, particularly regarding business tenant protections and lender rights. In Dubai, you must consider Law No. 26 of 2007 which regulates landlord-tenant relationships and may affect subordination arrangements and tenant notice requirements. Abu Dhabi properties require compliance with Law No. 20 of 2006 regarding property registration and recording of interests. All parties must be properly identified with valid UAE identification or commercial registration. The agreement requires notarization and may need registration with relevant land departments depending on the emirate. Consider obtaining legal opinions on enforceability under UAE court procedures, particularly regarding foreclosure processes and tenant protection mechanisms available under local law.
GOVERNING LAW
Applicable law
This Attornment And Non Disturbance Agreement is drafted to comply with United Arab Emirates law. Key legislation includes:
UAE Commercial Transactions Law (Federal Law No. 18 of 1993): Regulates commercial transactions and relationships between business entities, relevant for commercial leasing arrangements and related agreements.
Dubai Law No. 26 of 2007 (Regulation of Relationship between Landlords and Tenants): Specific to Dubai, governs landlord-tenant relationships and includes provisions affecting subordination and attornment arrangements.
Abu Dhabi Law No. 20 of 2006: Property registration law in Abu Dhabi, relevant for recording property interests and related agreements.
DIFC Real Property Law (DIFC Law No. 10 of 2018): If the property is in DIFC, this law governs real property matters including leasehold interests and related agreements.
UAE Registration Law (Federal Law No. 5 of 1985): Governs the registration of property rights and related agreements in the UAE land registry.
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