PHOTO
Tenants in Dubai could routinely pay housing rent using direct debits, bringing to an end the tradition of handing over a series of post-dated cheques at the start or renewal of a tenancy contract.
A circular from the Dubai Land Department (DLD) said Ejari, the emirate’s property rental platform, is now fully integrated with the “noqodi” direct debit system (UAEDDS), which will allow tenants to have recurrent rent payments automatically debited from their accounts.
Niral Jhaveri, head of property management at real estate broker Betterhomes, said tenants will now be able to configure rent payment schedules during the creation or renewal of tenancy contracts.
“Adopting electronic payment methods for rent will benefit both property managers and landlords by reducing manual administrative tasks and post-dated check handling,” she said.
“Tenants will also find it a convenient option as they no longer need to present physical cheques and won't have to worry about issues like mismatched signatures or a shortage of cheque books.”
Dubai first announced a direct debit system for rent cheques in July, but according to Betterhomes data, landlords still asking for rent in a single cheque paid 12 months in advance during 2022.
Tenants in the UAE have long paid rent using cheques, handing the physical payment over to a landlord or agent in a system which often bemuses new expat arrivals, who are used to paying automatically or online in their home countries.
When rental prices are rising and demand increasing, landlords often ask for a smaller number of post-dated cheques - one, three, four or six for a one-year rental contract. During slower markets, more landlords allow tenants to pay in 12 post-dated cheques.
“The trend of single cheque payments saw a rise in popularity during 2022, with a yearly growth rate of 6%, as we witnessed a shift in power to landlords,” Betterhomes said.
‘’Ultimately, the Direct Debit system promises to bring benefits to all relevant parties, including property managers, landlords, and tenants,” Jhaveri said.
“We are eager to observe the shifts in rental payment patterns over the coming months.”
Dubai rents surged to record levels in 2022 according to a report by real estate consultancy CBRE.
(Reporting by Imogen Lillywhite; editing by Cleofe Maceda)
