The move is expected to benefit landlords, property management companies and renters in the city
Dubai’s real estate proposition could benefit following a partnership between the Dubai Land Department and Emirates NBD. In the near future, rental cheque payments will be automated and digitised via the Central Bank of the UAE’s Direct Debit System (UAEDDS), according to the DLD.
According to a statement, the move will support the rental market and is aligned with the Dubai Government’s vision for paperless payment ecosystems, as well as with the Dubai 10X initiative.
“The real estate industry in the UAE is one of the best and most competitive in the world, and as part of our mission to present a regulatory environment in service of tenants and property owners, we have partnered with Emirates NBD in line with our efforts to fully digitalise our services as per the Dubai Paperless Strategy. Such collaborations will help facilitate and streamline the processes involved in the property market by employing progressive machinations on the path towards replacing the legacy systems in place,” said His Excellency Sultan Butti bin Mejren, Director General of DLD.
The collaboration is expected to benefit landlords and property management companies by eliminating the administrative activities required to manage post-dated cheques manually. It will also offer a seamless digital alternative to tenants for making rental payments using their bank account instead of issuing cheques, as per current practice. This will allow renters to also avail of flexible payment plans from their landlords or property management companies, the statement said.
It added that individual investors from overseas looking to purchase property in Dubai can also seamlessly open non-resident savings accounts with Emirates NBD, which will help in facilitating their purchase and managing their property and rent collection conveniently. Overseas investors will be supported by a dedicated relationship management team to help with a smooth account opening journey.
Hesham Abdulla Al Qassim, Vice Chairman and Managing Director of Emirates NBD remarked, “Emirates NBD is delighted to partner with Dubai Land Department on these strategic initiatives that will help in providing landlords and tenants with an easier, automated rent collection and management system as well as facilitate property purchases by new non-resident investors. As a leading bank in the UAE, Emirates NBD remains committed to supporting initiatives that will support the UAE’s long-term and strategic goals and in further strengthening Dubai’s standing as the investment destination of choice for international property investors.”
Speaking to Middle East Construction News (MECN) about how this move will impact Dubai residents, Lewis Allsopp, CEO of Allsopp & Allsopp noted, “A move in the digital direction for payment of rent in Dubai is celebrated news. The real estate market in the city is maturing and growing from strength to strength. It is only expected that the systems surrounding it are advancing rapidly to keep up.”
He added, “Tenants will no longer have to provide forward-dated cheques in order to rent a property in Dubai. This could mean that renting a property when expats first move to the emirate could happen faster as waiting for a chequebook is no longer required and could, in turn, lessen the length of stay in a short-term rental property.”
He concluded, “This advancement in payment options for rental contracts in Dubai will add confidence in the market. It could also make the cost of living here more manageable by offering monthly payments rather than the upfront payments that we are used to. This will open tenants’ options on rental properties significantly.”
It is as yet unclear whether this system will also apply to renters banking with other financial institutions. MECN has reached out to clarify and will update this story accordingly.
In June 2022, Allsopp & Allsopp said that Dubai real estate sales volume and values in May 2022 were the second highest on record. In the same month, Commercial Real Estate Consultants (CRC) said it saw a significant spike in demand for Grade A office stock in Dubai in May, while Real estate brokerage Union Square House (USH) stated that a quarter of homebuyers in Dubai are on the hunt for living spaces that provide mental health benefits.