Loan On Rental Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

Loan On Rental Agreement

"I need a Loan On Rental Agreement under UAE law for a commercial property in Dubai, where a bank will provide AED 5 million financing against rental income from a retail complex, with the loan to commence in March 2025 and include Islamic finance compliance provisions."

Document background
The Loan On Rental Agreement is a specialized financing instrument used in the UAE market where property rental income serves as security for a loan facility. This document is typically used when property owners or landlords seek to monetize their rental income stream or require financing against future rental payments. The agreement must comply with UAE Federal Law No. 5 of 1985 (Civil Code), relevant emirate-level property laws, and UAE Central Bank regulations. It includes detailed provisions for the assignment of rental payments, security arrangements, payment mechanisms, and default remedies. The document can be structured to accommodate both conventional and Islamic financing principles, making it versatile for various financing needs in the UAE real estate market.
Suggested Sections

1. Parties: Identifies all parties to the agreement including the lender, borrower, and any guarantors or related parties

2. Background: Sets out the context of the agreement, including details of the underlying rental agreement and the purpose of the loan

3. Definitions: Defines key terms used throughout the agreement, including references to the rental agreement, property, and payment terms

4. Loan Amount and Purpose: Specifies the loan amount, purpose, and any conditions precedent to drawdown

5. Rental Payment Assignment: Details how rental payments will be assigned or directed to service the loan

6. Payment Terms: Specifies repayment schedule, interest rates, calculation methods, and payment mechanisms

7. Security Arrangements: Details the security structure, including assignment of rental payments and any additional collateral

8. Representations and Warranties: Standard and specific representations regarding the rental agreement, property, and parties' capacity

9. Covenants: Ongoing obligations of the borrower regarding the rental agreement and property management

10. Events of Default: Defines circumstances constituting default and corresponding remedies

11. Termination: Conditions and process for terminating the agreement

12. Governing Law and Jurisdiction: Specifies UAE law as governing law and defines jurisdiction for disputes

Optional Sections

1. Islamic Finance Compliance: Required if the loan needs to be Sharia-compliant, detailing the Islamic structure used

2. Property Management: Include if the lender requires specific property management arrangements

3. Insurance: Required if specific insurance coverage is mandated for the property or rental income

4. Tax Provisions: Include if any specific tax arrangements or VAT considerations need to be addressed

5. Step-In Rights: Include if lender requires right to step into the landlord's position in certain circumstances

6. Third Party Rights: Required if any third parties (such as property managers) have specific rights under the agreement

7. Force Majeure: Include if specific force majeure provisions are needed beyond standard UAE law provisions

Suggested Schedules

1. Schedule 1 - Rental Agreement Details: Copy or key details of the underlying rental agreement

2. Schedule 2 - Property Details: Detailed description of the property including title deed information

3. Schedule 3 - Payment Schedule: Detailed repayment schedule including dates, amounts, and calculation methods

4. Schedule 4 - Security Documents: List and copies of all security documents

5. Schedule 5 - Conditions Precedent: List of all documents and conditions required before drawdown

6. Appendix A - Form of Notice to Tenant: Template notice informing tenant of the assignment of rental payments

7. Appendix B - Form of Payment Instructions: Template for rental payment redirection instructions

8. Appendix C - Compliance Certificates: Templates for ongoing compliance certification

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

Relevant legal definitions
Clauses
Relevant Industries

Real Estate

Banking & Finance

Commercial Property

Residential Property

Retail

Industrial

Hospitality

Office Space

Islamic Finance

Property Development

Asset Management

Investment Banking

Relevant Teams

Legal

Finance

Real Estate

Credit Risk

Compliance

Commercial

Asset Management

Treasury

Investment

Property Management

Due Diligence

Relationship Management

Relevant Roles

Legal Counsel

Finance Manager

Property Manager

Real Estate Director

Loan Officer

Credit Risk Manager

Compliance Officer

Commercial Director

Asset Manager

Investment Manager

Treasury Manager

Chief Financial Officer

Real Estate Investment Manager

Portfolio Manager

Relationship Manager

Due Diligence Officer

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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