With The New System, Tenants And Landlords Can Specify The Rent Payment Plan When Creating Or Renewing A Contract.
Ejari, a mechanism for renting out real estate in Dubai, is now “completely linked” with a direct debit system (DDS). The UAE Central Bank’s DDS does away with the requirement that tenants submit post-dated rental cheques, as the Khaleej Times reported in July of last year, according to the Dubai Land Department (DLD). In Dubai, annual rent is commonly paid in two, four, or six installments using post-dated cheques.
With the new system, rent payment arrangements can be made by both tenants and landlords at the time of contract creation or renewal. According to a DLD earlier this week, this will make regular payments from the tenants’ bank accounts easier. As a result, the landlord may get tenants’ signed authorizations for direct debit in place of cheques.
The DLD stated in the document that details how to set up a DDS in Ejari and digital wallet noqodi that “the UAEDDS…provides the people of UAE with an automated payment system that would facilitate repeated payments from their bank accounts.”
Tenants may sign an authorization document for instalment payments through the DDS. The DLD stated in the documentation that the device is primarily used to replace cheques. Moreover, automate the debit from a bank account. The DDS is advantageous to renters, landlords, and property management firms.
What Occurs When A Payment Is Unsuccessful?
The handbook specifies that Noqodi will make three retry attempts if a payment is unsuccessful. The tenant will be contacted if the payment is delayed. “Legal action” will be taken if it still does not happen. Additionally, landlords could fine the tenant.
According to the DLD manual, “stop payments” are free of charge. Dates of payment cannot yet be changed, but phase two will introduce this capability.
Will The Use Of Rent Cheques Gradually End?
Although uncommon, Dubai has used a direct debit payment method for rent for almost four years. Since 2019, residents of numerous areas in Dubai have been able to pay their rent without a cheque. According to a senior official from Dubai Holding Asset Management. Which oversees 15 neighborhoods, the corporation introduced the payment option when it released the “DubaiAM Life” app. The Ejari-DDS relationship, according to real estate specialists, might mark the “first of the phasing out of actual cheque payments.”
The group CEO of Allsopp & Allsopp, Lewis Allsopp, stated: It is important to note that the majority of people associate direct debits with recurring monthly payments. The majority of landlords in Dubai are not currently in favour of monthly payments. Due to the city’s record-high demand and limited supply. In this case, we do not need to be concerned because the direct debit payments can be scheduled. According to the contract’s stated payment periods, whether they be two, four, six, or even 12 instalments. Anisha Sagar stated that Dubai is advancing with the times while putting in place a strong regulatory system.
“Clearly, cheques have dominated the payment system for a very long time; direct debits were not previously an option. Direct debits are the preferred way of payment for rentals in many other markets throughout the world. Therefore, we anticipate beneficial effects for both tenants and landlords. With each transaction needing to be approved by the tenant’s bank. Which is tied to the Central Bank, landlords can feel more secure, which is important, Sagar continued.