Dubai court allows a private school to continue and renew lease contract for next 10 years

Dubai Civil Court ruled to continue the lease contract of a private school and renew it automatically for 10 years, from June 2027 until May 31, 2037, at an annual value of Dhs2.073 million, while obligating the property owner not to interfere with the school or place any obstacles to its operation with the competent authorities.

The details of the case date back to the time when a tenant filed a lawsuit requesting proof of the right to renew the lease contract for the land on which the school was built, concluded in July 2002 for a period of 25 years, explaining that the contract stipulated its automatic renewal for successive 10 year periods, provided that the increase in rent does not exceed 25% of the value of the last year of the contract.

The plaintiff explained that ownership of the property was later transferred to the appellee, and that he continued to deal with him as a tenant who paid the rent regularly, adding that the lessor had previously filed a lawsuit to increase the rental value, which rose to Dhs1.659 million annually until the end of the contract in May 2027.

The plaintiff added that the property owner sent him a notice in June 2026 refusing renewal and demanding eviction upon the expiry of the contract, offering to renew it for only 3 years for Dhs9.5 million annually, which the plaintiff considered a violation of the contract terms. The court affirmed that the contract explicitly stipulated automatic renewal for 10 years, and that the property owner accepted its terms since the ownership was transferred, and therefore the contract became effective.

The court concluded that the lease contract had not expired and that the condition for its automatic extension until May 31, 2037, was met, and set the annual rent during the renewal period at Dhs2.073 million, a 25% increase over the last rent.

The court also obligated the owner not to interfere with the plaintiff or place any obstacles or restrictions which hinder the operation of the school with the competent regulatory authorities, and ordered them to pay the lawsuit fees and expenses, while rejecting the remaining requests, including absolutely preventing the owner from requesting eviction, considering that the contract allows termination in specific cases, including delay in paying rent or breaching the terms of the contract.