"Three months fit-out free" is a headline, not a commercial term. It says nothing about when the clock starts, which costs keep running through it, or what happens when access, landlord works, permits or inspections slip. This guide turns a fit-out period on a Dubai commercial lease into six dates, a list of landlord deliverables, a permit path with a realistic duration, and a cost the tenant or an acquiring investor can actually model.
Why is the headline not enough?
Because two leases can both say "three months" and mean entirely different things. In one, the period begins when the tenant receives a unit with power, cooling, water, drainage information and the approvals needed to start. In the other it begins on signature, while the tenant waits six weeks for base-build drawings.
The second tenant has bought one month of fit-out for the price of three. Nothing in the headline distinguishes the two, which is why the negotiation belongs in the dates rather than the number of months.
Which six dates belong in the heads of terms?
Record all six separately, even where some coincide: legal lease commencement, physical possession, contractor access, rent commencement, service-charge commencement, and planned opening. The contract should not assume they are the same date, because the moment one slips you need to know which of the others moved with it.
A fixed rent commencement date is commercially harsh on a tenant who has not been given usable access. An open-ended one is unmanageable for a landlord. The workable middle is a measurable condition: rent starts a defined number of days after a defined, evidenced handover.
How do you tie the concession to usable access?
With a signed handover record, not a phone call. Photograph the unit, record meter readings, attach base-build drawings and list the landlord deliverables that must be in place before the clock starts.
- Unit condition and the contractor's access route into it.
- Electrical capacity, cooling, water and drainage information at the point of connection.
- Landlord and building-management no-objection letters.
- Contractor working hours, loading arrangements and security rules.
- The agreed remedy if landlord delivery is late.
Each of those is a common cause of a stalled fit-out, and each is cheap to resolve at heads-of-terms stage and expensive afterwards.
Map the permit path before you agree the duration
Requirements vary by jurisdiction, building and activity, so the first question is who regulates this address. In areas administered by the Dubai Development Authority, the fit-out permit service identifies requirements including contractor appointment, Ejari, owner no-objection, relevant authority approvals and approved drawings, and completion may also require formal certificates. Confirm the current requirements with the relevant authority for your specific premises rather than assuming a general route.
Then build the duration from the real sequence: design, landlord review, authority submission, contractor mobilisation, construction, testing, inspection and close-out. A three-month concession has little value if that sequence cannot realistically finish inside it, and the party who discovers the mismatch late is always the tenant.
Rent-free is not cost-free
During a rent-free fit-out period, a tenant is commonly still paying service charges, utilities, cooling, insurance, permit fees, deposits, contractor access charges and security costs. List each item and say who pays it, instead of relying on the word "free".
Under Dubai's jointly owned property framework, the owner remains liable to the management entity for service charges regardless of what the lease allocates to the tenant, and the approved rate per project is published on the DLD Service Charge Index. So a landlord offering a rent-free period is not offering a cost-free one to itself either — the building's charges keep running, and both parties should know who is carrying them.
Who pays when the programme slips?
Delay comes from four sources: landlord delivery, tenant design changes, contractor performance and authority review. The lease should distinguish them and say, for each, whether the rent commencement date moves.
Use a defined extension mechanism: written notice within a period, supporting evidence, and a stated consequence. Avoid the two lazy extremes — a clause that extends for any delay without evidence, and a fixed rent date that keeps running through a documented landlord failure. Neither survives a real dispute well.
What does an investor buying a leased unit need to model?
Concessions reduce the effective rent even when the headline lease rent is unchanged, and they often sit outside the lease's rent clause where a quick read misses them. Ask for the fit-out side letter, the handover record and the rent commencement evidence alongside the lease itself.
Then model the income from the date rent actually became payable and check it against the collection history, not from the date on the front page. A unit showing a strong headline rent with a long unamortised concession behind it is a different asset from one where the concession is spent and the tenant is trading.
How should a tenant model effective occupancy cost?
Add base rent, service charges, utilities, deposits, the fit-out spend itself, professional fees, finance cost and the period before revenue starts. That total is far more useful than an annual rent per square foot, because it is the number the business actually has to fund.
For a landlord, the same figures answer a different question: is the concession buying a stronger occupier, a longer term or a better fit-out that survives this tenancy? A longer rent-free period can be entirely rational when it does — but only if the dates and obligations are documented, because an undocumented concession is simply a gift with a dispute attached.
When does this apply?
At every new commercial letting involving works, at every renewal where further fit-out is planned, and on every acquisition of a tenanted commercial unit. It applies most where the activity needs significant mechanical, electrical or kitchen works, because those carry the longest approval and testing tail.
It applies less to a fully fitted unit taken as-is with no works at all — but even there, confirm the rent commencement date against the possession date, and confirm which costs run from which. It applies differently again at the other end of the lease, where reinstatement obligations decide what has to be removed.
Bottom line
Negotiate the dates, not the number of months. Tie the concession to an evidenced handover, build the duration from the real permit sequence, list every cost that keeps running, allocate delay by cause with a notice mechanism, and model the effective cost from the date money actually starts moving.
These points reflect what was published as of September 2026 and can change. Verify the current fit-out permit requirements with the authority that administers your premises, and take qualified legal advice on the lease before signing.
Frequently asked questions
Does rent always start when the tenant gets the keys?
Not necessarily, and the lease should say so explicitly. Possession, contractor access and rent commencement are three separate events that can fall on three different dates. If the lease defines only one date and calls it commencement, you are relying on an interpretation rather than a term. Define each event, and tie rent commencement to an evidenced handover rather than to the day a key changed hands.
Is a rent-free fit-out period actually free?
Usually not. Service charges, utilities, cooling, insurance, permit fees, deposits and contractor access or security charges commonly keep running through it. The concession is normally on base rent only, unless the lease says otherwise in terms. List every recurring cost in the heads of terms and mark who pays each one during the period, so the word "free" never has to be interpreted later.
Who applies for the fit-out permit?
It depends on the jurisdiction and on what the contract says. In areas administered by the Dubai Development Authority, the contractor is identified as the requester for the fit-out permit service, with requirements including contractor appointment, Ejari, owner no-objection, relevant authority approvals and approved drawings. Confirm the position for your specific premises with the authority that administers them before you build a programme around it.
What if the landlord delivers the unit late?
That is exactly what the delay-allocation clause is for. A well-drafted lease distinguishes landlord-caused delay from tenant-caused and contractor-caused delay, and states whether rent commencement moves. Without that distinction, you have an argument rather than a remedy. Ask for a notice requirement, an evidence standard and a defined extension method, and keep dated photographs from the handover onwards.
Can the fit-out period be extended?
Only if the lease provides a mechanism, which is why the mechanism matters more than the initial length. A sensible clause allows an extension for defined causes, on written notice within a stated period, supported by evidence. An open-ended extension right is unattractive to a landlord and an absent one is dangerous for a tenant, so the negotiation is about the causes and the evidence, not about the principle.
How does a fit-out concession affect a purchase price?
It reduces the effective income even where the headline rent looks unchanged, so it should be reflected in the acquisition model rather than discovered afterwards. Ask for the side letter, the handover record and the rent commencement evidence, then run the income from the date rent actually became payable and check it against what has been collected. Take your own advice on valuation; this is not a valuation opinion.
Related guides
- Rent-Free Periods and Fit-Out Contributions in Dubai Commercial Property: Normalise the Income
- Commercial Fit-Out Reinstatement in Dubai: Handover Duties at Lease End
- Shell and Core or Fitted Office in Dubai? Compare Cost, Fit-Out and Licensing
- Commercial Property CAM Charges in Dubai: Budget, Reconciliation and Lease Checks
- Commercial Power Load and Utility Capacity Before Buying or Leasing Dubai Premises
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