Lease With Option To Purchase for United Arab Emirates

Lease With Option To Purchase Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that combines a property lease with an option to purchase the property during or at the end of the lease term. This document establishes the terms and conditions for both the lease period and the potential purchase, including rent payments, purchase price calculation, option exercise procedures, and property maintenance responsibilities. It complies with UAE Federal Laws and local emirate-specific regulations, particularly those related to property transactions, registration requirements, and tenant-landlord relationships.

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What is a Lease With Option To Purchase?

The Lease with Option to Purchase agreement is a sophisticated legal instrument used in the United Arab Emirates when parties wish to combine a property lease with a future purchase opportunity. This arrangement is particularly useful for tenants who want to secure a future right to purchase while temporarily leasing the property, and for property owners seeking long-term occupancy with a potential sale. The document must comply with UAE Federal Law No. 5 of 1985 (Civil Code), relevant emirate-specific property laws, and RERA regulations. It includes detailed provisions for both the lease period (including rent, maintenance, and use restrictions) and the purchase option (including price determination, exercise period, and completion procedures). This type of agreement is commonly used in both commercial and residential contexts, requiring careful attention to local registration requirements and property transfer regulations.

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

1. Parties: Identification of lessor/potential seller and lessee/potential buyer, including full legal names, addresses, and registration details if companies

2. Background: Context of the agreement, property overview, and intention to enter into lease with purchase option arrangement

3. Definitions: Key terms used throughout the agreement including Property, Option Period, Purchase Price, Lease Term, etc.

4. Lease Terms: Duration, rent amount, payment schedule, maintenance responsibilities, and other standard lease provisions

5. Property Use and Maintenance: Permitted use of property, maintenance obligations, alterations, and improvements

6. Option to Purchase: Terms of the purchase option, including option period, exercise process, and purchase price calculation

7. Exercise of Option: Process and requirements for exercising the purchase option, including notice requirements and timeframes

8. Purchase Price and Payment: Detailed purchase price calculation, credit for rent paid, and payment terms upon exercise of option

9. Registration Requirements: Requirements for registering both lease and potential sale with relevant authorities

10. Insurance and Risk: Insurance requirements during lease period and risk allocation

11. Default and Remedies: Events of default under both lease and option terms, and corresponding remedies

12. Termination: Circumstances and process for termination of the agreement

13. Governing Law and Jurisdiction: Specification of UAE law application and jurisdiction for disputes

14. Notices: Process and requirements for formal communications between parties

15. Execution: Signature blocks and execution requirements

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

1. Broker Provisions: Include when real estate brokers are involved in the transaction, specifying their roles and commissions

2. Mortgage Contingency: Include when the potential purchase requires mortgage financing

3. Property Management: Include for commercial properties requiring specific management arrangements

4. Environmental Matters: Include for industrial or commercial properties with potential environmental concerns

5. Tenant Improvements: Include when specific improvements by tenant are permitted or required

6. Assignment and Subletting: Include detailed provisions when transfer rights are to be granted

7. Force Majeure: Include specific force majeure provisions beyond standard terms when required for high-value properties

8. Escrow Arrangements: Include when option money or other funds need to be held in escrow

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

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

2. Schedule 2 - Lease Payment Schedule: Detailed breakdown of lease payments, due dates, and payment methods

3. Schedule 3 - Purchase Price Calculation: Formula and method for calculating final purchase price, including any rent credit

4. Schedule 4 - Property Condition Report: Detailed assessment of property condition at lease commencement

5. Schedule 5 - Permitted Alterations: List of alterations tenant is permitted to make to the property

6. Appendix A - Property Title Documents: Copies of relevant title documents and registration certificates

7. Appendix B - Property Plans: Floor plans, site plans, and other relevant property drawings

8. Appendix C - Required Insurance Certificates: Forms and specifications for required insurance coverage

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

Purchase Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Real Estate

Commercial Property

Residential Property

Industrial Property

Retail

Hospitality

Manufacturing

Logistics

Healthcare

Education

Relevant Teams

Legal

Real Estate

Finance

Operations

Facilities Management

Risk and Compliance

Business Development

Property Management

Asset Management

Contract Administration

Relevant Roles

Real Estate Manager

Property Development Director

Legal Counsel

Chief Financial Officer

Facilities Manager

Commercial Director

Investment Manager

Asset Manager

Property Operations Manager

Risk Manager

Compliance Officer

Business Development Manager

Real Estate Broker

Property Administrator

Contract 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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