Opinion · By Jouslin Khairallah, Founder & Managing Director, Head of Litigation, KH Legal
Towards graduated legal protection that reflects how long a business has been established
Protecting investment does not end with making it easy to set up a company or obtain a trade licence. It needs a legal framework that lets an investor build a business and keep it going in a stable environment, and plan for the future without fearing the loss of the premises the business has been tied to for years.
Dubai Law No. 26 of 2007 regulating the relationship between landlords and tenants, as amended by Law No. 33 of 2008, sets out when a landlord may evict. Article 25(2) allows the landlord to seek eviction when the lease expires in specific cases. These include wanting the property back for personal use or for a first-degree relative, subject to the legal conditions, provided the tenant receives at least twelve months’ notice.
This raises an important legislative and economic question: is it fair for commercial and residential tenants to receive the same eviction notice, when the way they use the property is fundamentally different?
An investor who sets up a company, a professional office or a shop is not just renting space. They are building a business that becomes tied, step by step, to the place they chose. They invest in fitting out and designing the premises, building a brand identity, making their address known, attracting clients, and forming professional and commercial relationships that may last for decades. Over time, the address becomes part of the business’s identity and economic value, and can shape client trust and continuity.
How can we treat a residential tenant, who can move to another home, the same as an investor who has spent ten years or more building a business in a particular location, and give both the same legal notice?
Moving a business is not just moving furniture and equipment. It can mean losing clients, disrupting operations, paying to re-establish, and damaging a reputation built around the location.
I therefore believe the UAE legislator should take a positive step: distinguish between residential and commercial leases, and give commercial tenants protection in proportion to how long they have occupied the property and how well they have met their contractual obligations.
A graduated model
I propose a graduated system based on proportionality between the length of commercial occupation and the eviction notice period. For example:
- Where a business has occupied the property for five years and the tenant has met its obligations, eviction for the landlord’s personal use should require at least three years’ notice.
- Where a business has occupied the property for ten years or more, the notice should extend to at least five years.
The legislator could add further tiers, so that a newly established investor and one settled in the same premises for many years are not placed in the same legal position.
This proposal does not take away the landlord’s right to own or use the property. It aims for a fairer balance between private ownership and the investor’s right to a stable business. Nor would it stop the parties agreeing to end the lease early in exchange for fair compensation reflecting the tenant’s actual economic losses, including relocation and re-establishment costs and proven loss of the commercial value attached to the location.
Longer protection would encourage landlords and tenants to negotiate balanced solutions, instead of leaving the investor exposed to losing the premises as soon as the statutory notice runs out.
Why it matters for the economy
Business stability depends directly on laws that let investors establish and grow in a stable, predictable environment. Working patterns have changed, and remote work is now part of modern economic life, but physical premises remain essential to companies, professional firms and businesses.
Licensing rules in the UAE, including in a number of free zones, link certain activities to actual premises suited to the business, with requirements on records, staff, visas and regulatory obligations under each authority’s rules. If the premises are central to how economic activity is organised and supervised, it is logical that the law should give the investor a fair degree of stability in them.
The UAE has built a world-class investment environment that attracts companies, entrepreneurs and investors from around the world, and business sustainability and investor confidence are among its greatest strengths. Developing commercial lease rules should therefore be seen not merely as adjusting the landlord-tenant relationship, but as part of building a legal environment that supports long-term investment.
Business stability is not achieved simply by letting an investor set up a company. It also requires protecting them from disruption that could threaten the business after years of investment and commitment. Protecting property rights is fundamental; protecting the investment that grows inside that property is no less important for the wider economy.
Investment needs capital to start, but it needs stability to last and grow.
That is why I believe the time has come to revisit the eviction rules for commercial property and adopt graduated legal protection that reflects how long a business has been established and the tenant’s compliance, balancing owners’ rights with sustainable economic development.
This article sets out a proposal for legal reform and the author’s personal view. It does not describe the current law, which still provides a twelve-month notice period under Article 25(2) of Dubai Law No. 26 of 2007. For advice on a specific lease, contact info@khlegal.ae · +971 4 427 0845. Arabic version: اقرأ المقال بالعربية. Related: our real estate law services.