Cheques (for rental payments) are becoming obsolete globally. Modern countries focusing on automation and innovation use debit systems, allowing tenants to pay rent conveniently.
Since Dubai boasts a rapidly growing real estate market, it is following the same trend. Just last year, direct debit rental payments in Dubai were introduced.
Before this innovation, tenants had to pay rent through cheques. However, after this initiative by the DLD (Dubai Land Department), the tenants can easily make rental payments online.
Therefore, today, the method of direct rent payments in Dubai will be the focus of our discussion. Starting from what this system is and how it works, we will cover all the key steps involved and the benefits it offers.
An Introduction—Ejari Direct Rent Payments in Dubai
The direct rent payments in Dubai are a part of Ejari, so let’s understand what it is first.
Ejari Dubai is an online portal/legal contract that protects the rights and outlines the responsibilities of landlords and tenants. Ejari registration is mandatory when renting a property in Dubai.
The DLD has integrated Ejari with the Noqodi Direct Debit System (DDS) to allow direct rental payments. After this, the tenants will have access to an automated payment method that will deduct rental payments from their bank account on the due date. The Central Bank of the UAE (CBUAE) oversees the system and sets rules and regulations.
Let us explain how you can set up and make direct rent payments in Dubai.
Setting Up Direct Debit Rental Payments in Dubai
Setting up direct rent payments in Dubai is easy, and here are the steps you need to follow to do that:
- The landlord must agree to be paid through direct debit instead of cheques before a new tenancy agreement or contract renewal.
- The tenant and landlord will need to register on Noqodi DDS.
- The tenant must sign an authorization permit to allow rental payments to be deducted from their bank account (current or savings) or credit card.
- The tenant and landlord will also agree on the installment frequency, such as 2, 4, 6, or 12 rental payments per year.
- Neither party can change the agreed frequency till the next renewal of the rental agreement.
- Tenants will provide their bank account/credit card details to the landlord.
- Once the landlords initiate the direct rental payment, the amount will be automatically deducted on due dates.
Benefits of Direct Debit Rental Payments in Dubai
Direct rental payments in Dubai offer some amazing benefits for tenants and landlords. Let’s take a look at them:
Benefits for Tenants
- Direct payments are highly convenient and automated.
- Reduces the use of multiple cheques and paper waste.
- Helps avoid human error in cheques, such as wrong dates, names, or signatures.
- Eliminates chances of cheques being rejected because of mistakes.
- Allows tenants to set the most suitable payment frequency. Doing so reduces the financial burden of saving and making huge payments, and enables tenants to make smaller payments more frequently.
- Since the Central Bank of UAE oversees direct rent payments in Dubai, it is safer and more secure than cheques.
- Eliminates tenant’s concerns about whether their cheques are stored securely or not.
- There are no bank charges involved in direct debit payments.
- Helps tenants avoid eviction notices as the payments are deducted automatically from their accounts even if they’re busy.
Benefits for Landlords
- Landlords also benefit from the automated process as they don’t have to waste time sending payment requests to the tenants.
- Thanks to the direct debit payments, landlords can always hold at least two months’ rent.
- When landlords agree on smaller and more frequent payments, they have access to a stable income throughout the year.
- Landlords do not have to worry about storing tenant’s cheques securely.
- Landlords don’t have to wait for tenants to resend the cheques in case of mistakes.
Missed Direct Debit Rental Payment
As a tenant, you must always maintain sufficient funds in your bank account for direct rental payments.
The payment will fail if there are insufficient funds, and the Noqodi will request payment three more times. If all attempts to pay the rent fail, Noqodi DDS will contact you directly.
If you still fail to pay, the landlord can take legal action, just like in the case of a missed rental cheque.
Rental Payment through Cheques—Does it Still Work?
Direct rent payments in Dubai are still new, and many landlords have not adopted them. Therefore, some landlords still demand payments through cheques.
However, considering the trend and the ease it offers, direct debit payments will likely overtake most of the rental market.
FAQs
How can I set up direct debit rental payments in Dubai?
Firstly, you need to make an agreement with your landlord, and both parties must register on Noqodi DDS. You’ll also mutually decide on a payment frequency, after which the landlord will initiate the direct payment system. Subsequently, the rental payments will be deducted automatically from your account on due dates.
How frequently do I have to pay rent through direct debit in Dubai?
You can mutually decide the frequency of direct rental payment in Dubai with your landlord. Once agreed upon, you cannot change this frequency until the renewal of your rental agreement.
Can I use a prepaid debit card to pay rent in Dubai?
Yes, you can use a prepaid debit card to make direct rent payments in Dubai.
Can I still use a cheque to make rental payments in Dubai?
Yes, many landlords still accept rental payments through cheques in Dubai.
How can I pay rent online in Dubai?
To pay rent online in Dubai, you and your landlord must first agree and register on Noqodi DDS. After registration, the rental payment will be deducted automatically from your account at an agreed-upon frequency.
Final Words
Undoubtedly, the direct payment system has sped up and simplified the rental payments for both parties. Moving into 2024, we predict that Noqodi DDS will likely introduce more features and flexibility into their direct payment system.
But here’s a piece of advice. If you’re interested in renting a property in Dubai, consulting an experienced professional is the best way to go about it.
Dubai’s real estate industry can be overwhelming for newcomers. An experienced real estate consultant will not only help you find the best value for your money, but will also protect you from the mistakes and scams you may encounter as a novice.