Lease With Option To Buy for United Arab Emirates

Lease With Option To Buy Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that combines a property lease with a future purchase option. This document establishes the terms for both the rental period and the potential acquisition of the property, complying with UAE federal laws and emirate-specific regulations (particularly in Dubai and Abu Dhabi). It details rent payments, maintenance responsibilities, option exercise periods, purchase price calculations, and conditions for both the lease and purchase components. The agreement incorporates necessary RERA compliance requirements and considers UAE property registration procedures.

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What is a Lease With Option To Buy?

The Lease With Option To Buy agreement is a specialized legal instrument used in the UAE real estate market when parties wish to combine a property lease with a future purchase option. This document is particularly relevant in situations where potential buyers need time to arrange financing or want to test the property before committing to a purchase. It must comply with UAE federal property laws and specific emirate regulations, especially in Dubai and Abu Dhabi where real estate transactions are closely regulated. The agreement includes detailed provisions for rental payments, maintenance obligations, option exercise procedures, and purchase price calculations, while ensuring compliance with RERA requirements where applicable. This document type is commonly used in both residential and commercial property transactions and must be structured to account for UAE-specific property registration and transfer requirements.

What sections should be included in a Lease With Option To Buy?

1. Parties: Identification of the landlord/seller and tenant/potential buyer, including full legal names, Emirates ID numbers, and contact details

2. Background: Context of the agreement, including property details and the parties' intention to enter into a lease with an option to purchase

3. Definitions: Key terms used throughout the agreement, including Property, Option Period, Purchase Price, and other relevant definitions

4. Lease Terms: Duration of lease, rent amount, payment terms, and renewal provisions

5. Property Usage: Permitted use of property, maintenance responsibilities, and occupancy rules

6. Option to Purchase: Terms of the purchase option, including option price, exercise period, and mechanism for exercising the option

7. Purchase Price and Payment: Agreed purchase price if option is exercised, payment structure, and credit of rental payments if applicable

8. Property Condition: Current condition of property, required maintenance, and condition requirements for purchase option

9. Insurance and Risk: Insurance requirements during lease period and responsibility for damage or loss

10. Default and Remedies: Events of default under lease or option, and available remedies for both parties

11. Termination: Conditions for termination of lease and/or option, and consequences of termination

12. Governing Law and Jurisdiction: Application of UAE law and jurisdiction for dispute resolution

What sections are optional to include in a Lease With Option To Buy?

1. Property Management: Required when property is part of a managed community, detailing service charges and community rules

2. Mortgage Provisions: Required when property has an existing mortgage, detailing arrangements for discharge upon purchase

3. Agent Provisions: Required when real estate agents are involved, detailing their roles and commissions

4. Improvements and Alterations: Optional section detailing tenant's rights to make improvements and their treatment upon purchase

5. Sub-letting: Optional section if sub-letting is to be permitted during the lease period

6. Early Purchase Option: Optional section detailing conditions for early exercise of purchase option

7. RERA Registration: Required for properties in Dubai, detailing registration requirements with Real Estate Regulatory Agency

What schedules should be included in a Lease With Option To Buy?

1. Property Description: Detailed description of property including address, size, features, and included fixtures/fittings

2. Rent Payment Schedule: Detailed breakdown of rent payments, due dates, and payment methods

3. Property Condition Report: Detailed report of property condition at lease commencement

4. Option Exercise Notice: Template form for exercising the purchase option

5. Purchase Price Calculation: Breakdown of purchase price including any rent credit calculations

6. Required Maintenance Schedule: List of maintenance responsibilities for both parties

7. Property Title Documents: Copies of relevant title documents and certificates

8. RERA Permits: Copies of required RERA permits and registrations

Authors

Alex Denne

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

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Real Estate

Property Development

Banking and Finance

Legal Services

Property Management

Construction

Residential Housing

Commercial Property

Retail

Industrial Property

Relevant Teams

Legal

Real Estate

Compliance

Finance

Operations

Risk Management

Facilities Management

Business Development

Commercial

Property Management

Relevant Roles

Real Estate Manager

Property Developer

Legal Counsel

Contracts Manager

Real Estate Agent

Property Manager

Compliance Officer

Finance Director

Investment Manager

Facilities Manager

Business Development Manager

Risk Manager

Commercial Director

Operations Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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