Landlords receiving multiple rental cheques will soon be a thing of the past as the UAE gears up for a process of direct debit from tenants’ bank accounts for their annual leasing payments.
Earlier this month, the Dubai Land Department affirmed its agreement with Emirates NBD to play a part in the process. Currently, big developer-landlords are charging an additional fee for tenants wanting to do direct debit. The shift, which also highlights a support for the UAE de-criminalising most aspects of a bounced cheque, is set to cover more grounds in the upcoming weeks.
Although announcements have been made, it is unclear when the actual shift will take place as real estate and banking authorities are yet to release a timeline.
The Pandemic’s Role
The pandemic has inevitably pushed the UAE to come up with progressive ways to continue businesses in an efficient, safe and convenient manner. In line with that, the said move will be an alternative to landlords collecting cheques, especially with the trend of monthly cheque payments becoming predominant since.
We expect this to be rolled out across all emirates and with all banks in line with international practice.
The Dubai Land Department & Emirates NBD Deal:
- The UAE Central Bank’s Direct Debit System (UAEDDS) will take place where rental payments will be collected, automated and digitalised.
- The process will benefit landlords and property management companies as administrative duties of handling post-dated cheques manually will be eliminated.
- This will allow tenants to make rental payments using their bank accounts instead of issuing cheques, which will lessen the risk of bounced cheques and allow flexible payment plans from their landlords or property management companies.
- Overseas investors looking for properties to purchase in Dubai can open non-resident savings accounts with Emirates NBD, which will help in facilitating their purchase, managing the property and collecting rent.
Source: Gulf News 07.07.2022