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A brief summary of the new industrial tenancies law

Decision No. 45 of 2014 in relation to Industrial Tenancies was published in issue no. 3159 of the Legal Gazette on 5 June 2014 (Law) and came into force on 6 June 2014. The Law is to be read in conjunction with the existing framework governing industrial zones in Bahrain and in particular Decree No. 28 of 1999 in relation to the Establishment and Organization of Industrial Zones

The Law affects tenancies in relation to tenancies in industrial zones. It specifically relates to tenants who are seeking permits to commence building and construction work, as well as those who have already acquired such permits.

In order to obtain a permit to commence work on the relevant land which has been leased, tenants are required to submit an application accompanied by the following documents:

  • the finalized blue prints and plans
  • the official timeline for the construction and building process from the directorate of industrial zones
  • a copy of the official issued building license from the Ministry of Municipalities Affairs and Urban Planning, and
  • a copy of the building agreement between the tenant and one of the contractors.

The Law intends to regulate the conduct of tenants with building permits in industrial zones. It sets the consequences in relation to tenants’ failure to fulfil certain obligations and commitments set out by law.

Where a tenant fails to initiate construction work, or complete the work, the Law sets out certain rules in relation to tenants who have refused to give up their building permits within three months of the relevant date referred to above.

In order to retain the building permit, the tenant must provide a comprehensive written plan outlining what is yet to be done, a detailed timeline for the remaining period and evidence pertaining to the reason building work has come to a halt.

The Law also sets out the consequences and the procedural action to be taken against a tenant who fails to provide these required documents.

Where there is a ministerial decision to cancel a building permit, and the appeal time has lapsed, the industrial areas directorate is entitled to take the required steps in order to evaluate the land with regard to the buildings and structures constructed upon it.

Procedural guidance is also set out in relation to the termination of the lease, either upon the end of its term or due to termination. In these instances, the tenant must return the leased land devoid of any buildings or construction works.

Failing that, the Ministry of Industry and Commerce is entitled to instruct such action at the expense of the tenant.

The article was written by Reem Al Mahroos.

For more information please contact Simon Green on +973 17 133206 or simon.green@crsblaw.com.