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Monthly rental cheques are a must

Ed Attwood argues that landlords are back to their old tricks

With rents back on the rise in some parts of Dubai, some landlords appear to be getting back to their pre-2008 ways.  I’m hearing more and more that owners are demanding that potential clients pay for their entire year’s rent upfront, via a single cheque.

This has been a traditional part of life in Dubai. But not all of us are working for companies that provide us with a housing allowance, which is the main reason the one-cheque policy came into being in the first place. Your company would pay for your accommodation, and the easiest way to do this was via an upfront lump sum. Later on, even if companies weren’t paying for housing, many would provide an interest-free loan to cover the cost of that one cheque.

But Dubai is a different place these days. It’s not exactly a ‘hardship posting’ any more, and many firms aren’t keen on providing a housing allowance. And why should they, when no other city in the world demands payment of a year’s rent in advance?

I can see why landlords want the full payment in one go. After all, having that lump sum sitting in the bank will earn them far more in interest than a dribble of monthly or quarterly payments would. And if they decide to invest the full amount, their returns are likely to be much higher.

The Real Estate Regulatory Authority (RERA) clearly feels that the sector doesn’t need any more regulation, according to recent remarks by director general Marwan Bin Ghalaita.

But I disagree. Those who can pay should, of course, be able to pay for a year upfront, presumably at a significant discount. But renters should also be offered a choice, which should include the ability to pay monthly. A move to mandate that might also help avoid the types of rental scam – such as last year’s Shamyana scandal  - which only serve to destroy confidence in the local market.

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Posted by: DAR

I don't disagree with the sentiment in the article, and as a landlord in Dubai I am quite happy with 12 cheques, but I will point out one error. The 'one cheque' approach is not unique to the UAE, it has been and remains the practice in Jakarta for any 'higher end' and 'expat type' properties.

Posted by: Peter Hudson

No One puts a gun to a tenants head to pay rent by 1 cheque.

There are plenty of landlords who accept multiple cheques. In my experience majority of 1 cheque deals are done at a decent discount on annual rent to benefit the tenant. Many tenants actually prefer to avail the discount and pay by 1 cheque.

If you don't like it feel free to say NO. Dont slant the story against landlords please

Posted by: bre

Peter you appear to be a landlord and that is why your on the defensive and in-sensitive to what normal people go through.

Dont be so high and mighty. As a person who is renting, i faced all the problems that this article mentions, so get off your high horse and admit there is a problem here.

Posted by: Thommo

Make the landlords pay the 5% agents commission first of all and most certainly mandate monthly or bi-monthly rental cheques, if the tenant has the luxury of 1 cheque then allow that to be the negotiation with the landlord for a lower rent. If the authorities don't do something about the landlord greed now; a crash reminiscent of 2008/9 is imminent. This short term greed approach is not sustainable in any country and the tenants should stand up for their rights and avoid been bullied whether you have an allowance or not.

Posted by: mike ali

what about almost all landlords increasing higher percentage where some it reaches more than 25% , who can control this?
such regular increase will effect the market and buying power of the people living here as they will do their best to save more money to pay for the rent and in addition they will start sharing and this also not good , and they will reduce all their buying here unless for the necessary and urgent required things .
There must be more strict rules applied on EVERY ONE and not on certain landlords and others NO as they are in strong position .

Posted by: Neil

Hear hear...another good subject for AB to raise along with schools stealing fees and no doubt numerous other dodgy practices!

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