When you sell a business in Dubai, the buyer isn’t just buying your equipment, staff and customers. They’re buying the right to keep trading from your location. That right sits in your lease, and your lease belongs to your landlord’s terms, not yours.
That’s why the lease is one of the first things a serious buyer asks about, and one of the most common reasons a deal slows down. Here’s what happens to your lease when you sell, why the landlord’s approval matters, and how to prepare so it doesn’t hold up your sale.
Why the Lease Matters So Much in a Business Sale
For most shops, salons, clinics, cafés and gyms, the location is a big part of the value. A busy ground-floor unit with good parking can be worth more than the fit-out inside it.
A buyer will want to know:
- How long is left on the lease
- What the rent is and how it’s paid (cheques, instalments)
- Whether the rent is likely to go up on renewal
- Whether the landlord will accept them as the new tenant
If any of these are unclear, buyers either lower their offer or walk away.
You Can’t Transfer the Lease Without the Landlord
In Dubai, a tenant generally can’t hand over or sublet a lease to someone else without the landlord’s written approval. Most commercial leases also say this directly.
So even if you and the buyer agree on everything, the landlord still has to say yes. In practice, this happens in one of two ways:
- The existing lease is transferred to the buyer, with the landlord’s consent
- A new lease is signed directly between the landlord and the buyer, and your lease ends
Which route applies depends on the landlord. Large landlords and master developers usually have their own process, forms and fees.
What the Landlord Usually Asks For
Every landlord is different, but most will want some or all of:
- A request or NOC application from the current tenant
- The buyer’s passport, Emirates ID or visa copies
- The buyer’s trade licence, or the updated licence after transfer
- Proof the current rent and service charges are fully paid
- A transfer or admin fee
Some landlords also use the change of tenant to review the rent or the lease terms. That’s why it’s worth speaking to the landlord early, not on the last day.
Ejari and the Trade Licence Go Together
Your Ejari (the registered tenancy contract) is linked to your trade licence. When the licence changes hands, the tenancy record needs to match the new owner, and licence renewals and amendments usually need a valid Ejari.
This is why the landlord’s approval and the licence transfer are normally handled together on the path to transfer day. If one is delayed, the other usually is too.
You can read more about this stage in our guide: What Happens Between the MOU and the Licence Transfer.
Who Pays the Rent Until the Sale Completes?
On a standard business sale, the seller is responsible for the rent, salaries and other running costs up to the day of transfer. From transfer day, they pass to the buyer.
It’s important that rent is fully up to date before transfer. Unpaid rent, bounced cheques or outstanding service charges can stop the landlord from approving the new tenant.
What Happens to Your Security Deposit and Advance Rent?
This is a question almost every seller asks.
In BFS sales, the landlord security deposit and any rent you’ve already paid in advance are returned to you, the seller, on top of the agreed sale price. They’re not part of the price the buyer pays for the business.
This should always be written clearly in the sale agreement so there’s no confusion on transfer day.
Common Lease Problems That Delay a Sale
- Only a few months left on the lease, with no clear renewal
- Rent arrears or unpaid service charges
- The landlord isn’t told about the sale until the very end
- A lease that restricts the business activity the buyer wants to run
- The landlord asks for a large rent increase as a condition of approval
- The lease is in a different name from the trade licence
Most of these can be fixed if you deal with them before listing the business, not after a buyer is found.
How to Prepare Your Lease Before You Sell
- Find your current tenancy contract and Ejari
- Check the remaining lease term and renewal terms
- Make sure all rent and service charges are paid up
- Read the clause on transfer, assignment or subletting
- Ask the landlord or property manager what their transfer process and fees are
- Keep proof of your security deposit and any advance rent paid
Having this ready shows buyers the business is organised, and it makes the whole sale faster.
Keep the Sale Confidential
Many sellers worry that telling the landlord too early will leak the sale to staff or customers. A broker can help you time this properly, so the landlord is involved when a serious buyer is ready, not while you’re still testing the market.
Read more: Why Confidentiality Matters When You Sell Your Business in Dubai.
Key Takeaways:
- Your lease can’t be transferred without the landlord’s written approval
- The landlord may transfer your lease or sign a new one with the buyer
- Ejari and the trade licence transfer usually move together
- The seller pays rent and running costs up to transfer day
- In BFS sales, the security deposit and advance rent go back to the seller, on top of the sale price
- Prepare your lease documents before you list, not after
FAQ:
Can I sell my business without the landlord’s approval?
In most cases, no. A tenant generally can’t transfer or sublet a commercial lease in Dubai without the landlord’s written approval, and the buyer needs a valid tenancy to keep trading from the premises.
Does the buyer take over my existing lease?
It depends on the landlord. Some transfer the existing lease to the buyer, while others ask the buyer to sign a new lease directly with them.
Who pays the landlord’s transfer fee?
It varies by landlord and by deal. Who pays should be agreed between buyer and seller and written into the sale agreement.
What happens to my security deposit when I sell?
In BFS sales, the landlord security deposit and any advance rent paid are returned to the seller, on top of the agreed sale price.
Can the landlord increase the rent when the business is sold?
Some landlords use the change of tenant to review the rent or lease terms. It’s best to speak to the landlord early so there are no surprises.
When should I tell my landlord I’m selling?
Usually once a serious buyer is in place. A broker can help you time it so the sale stays confidential.
Call to Action:
Thinking of selling your business in Dubai?
BFS handles the whole process confidentially, from finding the right buyer to transfer day.
Sharing Is Caring!