The rent nightmare

I'm a superstitious person. I don't believe in counting my chickens before they've hatched.

Or in making major financial commitments when I don't know what's around the corner.

Which is why I find living in Dubai so difficult. Paying for up to a year's rent in advance on my flat goes completely against my principles.

Everytime I have to hand over that cheque I feel a lump in my throat.

But unfortunately in this part of the world tenants have no choice but to make these heavy financial commitments on an annual or bi-annual basis.

In very few other countries in the world do landlords expect rent to be paid so far in advance and it is a requirement that be financially crippling for tenants.

It is almost impossible for anybody living and working in the emirate to do this without taking out some sort of bank loan, going into overdraft or pushing their credit cards to their maximum limit.

I am in two minds about why this system exists in Dubai. On the one hand it the sign of an immature market where crude unsophisticated methods are used by landlords to ensure they are guaranteed money in their pockets.

It is also a sign of lack of trust. The UAE's population is, after all, a highly transient one where many residents have the intention of one day returning to their home countries.

Landlords, probably rightly so, are very concerned about the possibility that tenants will up sticks and leave without paying off their rent.

On the other hand the practice is playing a big part in the growth of the region's banks and financial institutions, which have benefited hugely from the number of expatriates applying to them for personal loans and credit cards.

Given this there is every chance that financial institutions have helped to perpetuate the practice.

It's no secret that it is not difficult to get a loan or a credit card in Dubai.

To date the absence of a credit checking bureau in the UAE has meant that no matter how many existing debts and financial commitments you already have, you can pile on more simply by applying for another loan from the bank and they have no accurate way of checking your credit history.

However, there has been much talk of a federal credit bureau being introduced in the UAE - a practice that would make it far more difficult to apply for loans.

I wonder whether, if that happens, many tenants would simply not be able to honour the requirements of their landlords for advance rent and landlords would therefore be forced to end the practice.

All this assumes that the presence of a credit-checking bureau would stop banks from dishing out loans to expatriates so freely.

What must not be forgotten however, is the fact that to some extent the current very liberal credit system suits banks down to ground.

After all, why would they want to have to turn loan customers away - when they could be earning bucket loads of interest from them?

What all this boils down to is that banks and landlords feed off each other to perpetuate a situation that is costly and inconvenient for tenants. But the shortage of property in the market means tenants put up with it.

And as I sign away another year's worth of money to my landlord it is a situation that I hope will change soon.