Lease Option Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

Lease Option Agreement

"I need a Lease Option Agreement for a retail space in Dubai Mall, with a 2-year lease term starting March 2025 and an option to purchase the property within the lease period, including specific provisions for retail operating hours and mall regulations."

Document background

The Lease Option Agreement serves as a crucial legal instrument in the UAE real estate market, combining the immediate need for property occupation with a future purchase opportunity. This document type is particularly relevant in the UAE's dynamic property market, where businesses and individuals often seek flexibility in their property arrangements. The agreement must comply with UAE federal laws, including the Civil Code and Commercial Transactions Law, as well as specific emirate-level regulations such as Dubai Law No. 26 of 2007 or Abu Dhabi Law No. 20 of 2006. The Lease Option Agreement includes detailed provisions for both the lease period and the purchase option, making it suitable for various commercial and residential scenarios. It's commonly used when potential buyers want to secure a property's purchase price while having time to arrange financing or assess the property's suitability for their needs.

Suggested Sections

1. Parties: Identification of the lessor/option grantor and lessee/option holder, including full legal names, addresses, and registration details if companies

2. Background: Context of the agreement, including property ownership confirmation and parties' intentions regarding lease and future purchase option

3. Definitions: Definitions of key terms used throughout the agreement, including Property, Option Period, Purchase Price, and Exercise Notice

4. Lease Terms: Core lease provisions including rent amount, payment terms, duration, and renewal conditions

5. Option Grant: Explicit grant of the option to purchase, including the option period and conditions for exercise

6. Option Price and Payment: Purchase price for the property if option is exercised, including any credit for rent paid

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

8. Property Maintenance and Repairs: Responsibilities for property maintenance during the lease period

9. Insurance and Risk: Insurance requirements and allocation of risk during the lease period

10. Default and Remedies: Consequences of default under either the lease or option provisions

11. Representations and Warranties: Standard representations regarding property ownership, authority to contract, and property condition

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

13. Notices: Process for serving formal notices under the agreement

14. General Provisions: Standard boilerplate clauses including entire agreement, amendments, and severability

Optional Sections

1. Mortgage and Financing: Include when the property has existing mortgage or when buyer requires financing arrangements

2. Property Management: Include when specific property management arrangements are needed during the lease period

3. Sub-letting Provisions: Include when sub-letting might be permitted during the lease period

4. Development Rights: Include for properties where development or major modifications might be considered

5. Environmental Matters: Include for industrial properties or where environmental concerns exist

6. Service Charges: Include for properties in managed developments or with common areas

7. Option Premium: Include when a separate payment is required for the option right

8. Valuation Mechanism: Include when purchase price will be determined by future valuation

Suggested Schedules

1. Property Description: Detailed description of the property including title details and floor plans

2. Rent Payment Schedule: Detailed breakdown of rent payments including due dates and amounts

3. Condition Report: Documentation of property condition at lease commencement

4. Permitted Uses: Detailed list of permitted uses of the property during lease period

5. Option Exercise Form: Template form for exercising the purchase option

6. Service Charges Schedule: Breakdown of service charges if applicable

7. Maintenance Schedule: Detailed breakdown of maintenance responsibilities

8. Required Insurance: Specific insurance requirements and minimum coverage amounts

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

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Real Estate

Commercial Property

Retail

Industrial

Hospitality

Office Space

Residential Property

Manufacturing

Warehousing

Mixed-Use Development

Relevant Teams

Legal

Real Estate

Finance

Operations

Risk Management

Business Development

Property Management

Asset Management

Facilities Management

Corporate Services

Relevant Roles

Real Estate Manager

Property Development Director

Legal Counsel

Commercial Director

Facilities Manager

Chief Financial Officer

Business Development Manager

Real Estate Investment Manager

Asset Manager

Property Portfolio Manager

Leasing Manager

Corporate Real Estate Manager

Risk Management Officer

Operations Director

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Finance Lease Agreement

UAE-governed agreement establishing terms for asset financing through a lease structure, detailing rights and obligations of lessor and lessee under UAE law.

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Let's create your Lease Option Agreement

Authors

Alex Denne

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