Buying a tenanted Dubai property: the lease transfers, vacant possession takes 12 months

Why the lease survives a sale

A sale does not end a tenancy in Dubai. Article 28 of Law No. 26 of 2007 states that transferring ownership of a leased property to a new owner does not affect the tenant's right to continue occupying it under the lease contract entered into with the previous owner, provided that the lease contract has a fixed term. For a buyer, that means the Ejari-registered lease on a tenanted unit normally transfers with the property: the incoming owner becomes the landlord, bound by the same contract the outgoing owner signed, until that fixed term ends.

When you buy a tenanted unit, you also inherit an existing landlord-tenant relationship, with its rent, deposit, cheques and notice obligations already in motion. Most of what differs between a tenanted and a vacant purchase follows from that single fact.

The condition in Article 28 matters more than it first appears. It protects the tenant only while the lease contract has a fixed term. Almost every Ejari-registered residential lease in Dubai is written with a start date and an end date, so in practice this condition is rarely the sticking point. Still, it is worth confirming on the Ejari certificate itself that the contract you are inheriting shows a defined expiry date, rather than assuming it from the listing description alone. A buyer who skips this check is relying on an assumption, not on what the registration actually says.

For a buyer, the practical upshot is sequencing. You do not choose whether the tenancy survives the sale; the law decides that for you. What you can plan for is when the tenancy ends, what notice you owe before then if you want the unit for yourself, and what you inherit from the seller in the meantime. The rest of this article works through each of those in turn.

Taking possession for personal use: notice, form and timing

Some buyers assume that once a sale completes, they can ask the sitting tenant to leave. Dubai's rental law does not work that way, and two claims that circulate online get this wrong in opposite directions.

Under Article 25(2) of Law No. 26 of 2007, as amended by Law No. 33 of 2008, an owner may evict a sitting tenant at lease expiry to sell the property or for personal or family use, provided at least 12 months' notice is served. That notice is only valid if it is served through a notary public or registered mail; delivery by email, SMS, WhatsApp, a verbal request or an agent does not satisfy the requirement, and the clock does not start running.

One claim holds that 90 days' notice is enough to evict a tenant for personal use. That period does exist in the law, but it governs something else. Article 14, also amended by Law No. 33 of 2008, requires a party wishing to amend lease terms under Article 13, for example a rent change, to give at least 90 days' notice before expiry. It covers amending terms, and its amended text does not address non-renewal or eviction for sale or personal use. A buyer who plans to move in at the end of the current lease needs the 12-month route under Article 25(2), not the 90-day route under Article 14.

A second claim holds that selling a property is never valid grounds for eviction. That is also wrong: Article 25(2) explicitly lists the owner's intention to sell among the grounds for eviction at lease expiry, on the same 12-month, notary-or-registered-mail terms as eviction for personal use.

Eviction mechanics are a large topic on their own, with separate coverage of the notice letter, tenant disputes and the Dubai Rental Dispute Settlement Centre. This article sticks to what a buyer needs at the point of purchase: whether vacant possession is realistic on your timeline, and what to get right if it is not.

Transferring rent, deposit and Ejari to the new owner

Three things move from seller to buyer when a tenanted unit changes hands: the rent going forward, the tenant's security deposit, and the Ejari registration itself.

Article 20 of Law No. 26 of 2007 requires the landlord to refund the tenant's security deposit, in full or less lawful deductions, once the tenancy ends and the unit is vacated. On a tenanted sale, that future obligation effectively passes from seller to buyer, because the buyer becomes the landlord the tenant will eventually ask for the refund. The conventional arrangement at completion is that the seller hands the deposit to the buyer, along with any post-dated rent cheques covering the period after the transfer date, so the buyer holds what it needs to meet that obligation later.

The deposit itself is a matter of market convention rather than statute: the customary figure is 5% of annual rent for an unfurnished unit and 10% for a furnished one. Law No. 26 of 2007 does not fix this percentage; it is practice that has become standard across Ejari contracts.

Ejari also needs attention after the title deed transfers. In practice, the registration is updated to show the new owner as landlord, submitted through the Dubai REST app or an Ejari centre, together with the new title deed, the existing Ejari contract and the sale completion certificate. Some property-services blogs quote a specific fee and turnaround time for this update. That figure could not be confirmed against a primary Ejari or Dubai Land Department fee schedule, so check the current charge directly with an Ejari centre rather than relying on a number seen on a blog.

Due diligence: Ejari, rent against the index, and remaining cheques

Before completion, a buyer of a tenanted unit should pull the current Ejari certificate to confirm the registered rent, the tenant's details and the lease end date match what the seller has disclosed. A mismatch between what the seller describes and what Ejari actually shows is one of the more common ways a tenanted purchase goes wrong.

It also helps to compare that Ejari-registered rent against the unit's current Smart Rental Index band. The Dubai Land Department launched the Smart Rental Index 2025 on 2 January 2025, an AI-driven rental valuation system that classifies buildings and integrates with Ejari contract data, replacing the older area-average rental index. Checking where the sitting tenant's rent sits against this index is how a buyer gauges whether that tenant is paying below, at, or above the level that would allow an increase at the next renewal, which matters directly to the income the unit will produce after purchase. Some commentary claims the index still applies the same percentage-based rent-increase bands used before 2025. That continuity could not be confirmed from a primary source, so treat any specific increase percentage quoted online with caution until the regulator confirms it directly.

Finally, count the outstanding post-dated rent cheques for the remainder of the lease term and match them against the months of rent still owed. A tenanted sale normally does not complete until this reconciliation is done, since it determines exactly which cheques the buyer receives and what period each one covers.

Put together, a buyer's pre-completion checklist for a tenanted unit looks different from a vacant one mainly in these four checks: the Ejari certificate against the seller's disclosure, the registered rent against the Smart Rental Index band, the number and dates of outstanding cheques against the lease end date, and the condition in Article 28 that the lease has a fixed term. None of these replace the ordinary due diligence that applies to any Dubai purchase, such as checking the title deed and any outstanding service charges; they sit alongside it.

How lenders treat tenanted units

UAE banks do not operate a distinct regulatory category for buy-to-let lending. The same loan-to-value ratios and approval criteria apply to a unit whether the buyer intends to occupy it or lease it to a sitting tenant. In practice, though, lenders commonly price a mortgage on a tenanted investment unit 0.25 to 0.75 percentage points higher than an equivalent owner-occupier mortgage, reflecting the risk that rental income is disrupted if the unit sits vacant between tenancies. This is a pricing decision individual banks make, rather than a rule set by the regulator. For a buyer comparing financing offers, that means the headline rate on a tenanted unit is worth checking against what the same lender would quote on a vacant one, since the gap is set by the bank's own risk pricing and can vary between lenders rather than following a fixed formula.

The "higher yield" angle, and its limits

Tenanted units are sometimes marketed as offering a better net yield than a comparable vacant unit, on the logic that the same rental income is being measured against a lower purchase price. A discount for tenanted apartments against vacant equivalents circulates in industry commentary, but the specific figure rests on a single source that could not be independently corroborated, so treat it as unconfirmed rather than a reliable number to plan around.

What is confirmed is narrower, and arguably more useful: the lease transfers under Article 28, the rent and deposit arrangements transfer with it, and getting vacant possession, if that is the plan, depends on the 12-month notice described above rather than on anything a listing agent says about timing. A buyer comparing a tenanted listing's advertised yield against a vacant one should weigh that notice period and the cost of a mortgage priced for a tenanted unit into the comparison, alongside the headline rent.

A note on which law applies

Law No. 26 of 2007, as amended by Law No. 33 of 2008, which governs this landlord-tenant relationship, remains in force as of the review date. It is unaffected by Federal Decree-Law No. 25 of 2025, which replaced the 1985 UAE Civil Code with effect from 1 June 2026; that change concerns the general civil code, not Dubai's specific rental law.