The new regulations in Abu Dhabi real estate sector including compulsory registration of all leases covering residential; commercial and industrial property is good for both tenants and landlords, said legal experts DLA Piper.

The region's leading full service business law firm, DLA Piper said the online Tawtheeq system, which is due to go live on September 1, will provide stronger governance leading to clarity, transparency and stability in the market.

Duncan Pickering, partner of DLA Piper ME real estate team, based in Abu Dhabi, said: “Landlords and companies have already started coming to us for advice on how to approach the new system and we have been able to show them the benefits and advantages it brings.'

'But, we have also pointed out that if landlords do not to register the potential disruption it could bring to their tenants is severe,' he stated.

The new system applies to leases of four years or less and all properties must be registered.  Access to Government and other services - Commercial Licenses, utilities and telecommunications etc – may be made conditional on the production of a registered lease.

“In this competitive leasing market, we expect to see well prepared landlords gaining a significant advantage from working with Tawtheeq. All landlords (account holders), will need to be registered and although the process does not stop rent negotiation, it will identify and manage situations where special conditions apply,' he pointed out.

'Special conditions can be owner, building or transaction specific. Tawtheeq will review and approve these special conditions to ensure compliance with law.  The transparency this provides is to the real advantage of reputable landlords and all tenants.” he added.

The application for a Registered Lease will be online and even when special conditions are included Tawtheeq is looking to turn around applications in five working days, with the system operated by the Abu Dhabi Municipality. 

The first registration period is for one year after which the property can be reregistered for the remaining period of the lease, said the expert.

“The initial one year lease period will allow the Municipality to ensure that the terms of the lease are being met and that there is no breach of contract, for example over planning or use, which again benefits both the account holder and the tenant.

'The system also identifies if the landlord is trying to breach the rent cap, which is currently set at 5 per cent.  If this happens the tenant shall be required to indicate online that it approves the new rent and understands that the cap has been exceeded.:'

'This applies also applies when re-letting a property, and will help create a stable marketplace,' Pickering added.-TradeArabia News Service