REM Professionals welcome the transition from cheques to direct debit and give an insight into what impact it will have on the industry as a whole.
There is no doubt that the UAE property market is moving fast. Last week saw a massive move by the Dubai Land Department, which announced the dropping of what had been a standard practice for decades - tenants issuing multiple cheques to their landlords for their annual rental payments. Going forward, all such transactions will be settled – seamlessly, as market sources say – through direct debits from tenants’ bank accounts.
Last week Dubai Land Department confirmed an agreement with Emirates NBD as part of the process. The transition from cheques to direct debits will gain more ground in the weeks ahead. The move has been welcomed by many industry professionals in the real estate management sector. REM Times talks to a cross-section of professionals who explore the impact this move will have on the market and why such a change was much needed in the Dubai market.
Madhav Dhar, Co-Founder, and COO of ZÄÂZEN Properties
“With Dubai’s realty sector having just recorded its highest sales figure in 13 years, with AED 22.7 billion in June, the UAE’s real estate landscape is once again booming. Eliminating the post-dated rent cheque system, which ranges from 1 to 4 cheques historically, will ease the cash flow burden on renters and align Dubai with rental payment practices followed by most leading global cities.
The recently formed partnership between the Dubai Land Department and Emirates NBD will help in maintain momentum for the country’s property market and continue the transition toward an automated digital payment system In addition to saving time for all parties involved, this collaboration’s alignment with the Dubai government’s paperless strategy will also save resources and preserve the environ future generations to come; this development effectively reinforces the UAE’s pioneering vision and relentless approach to continually upping the bar to exemplify its international revere.”
Fadi Nwilati, CEO, Kaizen Asset Management
“The collaboration between Dubai Land Department and Emirates NBD is a historic move and will have a profound impact on every real estate stakeholder. As a property management firm, we believe that this collaboration will truly simplify the rent payment process for tenants across Dubai and contribute to a digitized and further superior customer experience - something that all of us strive towards; in line with global practices, while optimizing our operational efficiency by eliminating the existing administrative activities required to manage post-dated cheques manually and will empower us in our mission ‘To Create Memorable Experiences and Communities’.”
Jennifer Andal, Director - Owner’s Affairs, Better Communitie
“Rental payments via direct debit will facilitate faster and more convenient transactions. Whilst already implemented by few a Property Management companies a few years back, the official endorsement by Dubai Land Department (DLD) legitimizes the initiative and makes it more accessible to everyone. This positive move to digitize transactions will not only boost landlord confidence but will also prove advantageous to tenants who struggle to make bulk quarterly payments. Under the new arrangement with Emirates NBD, monthly installments will be made available.
The UAE property sector will surely see positive impacts as soon as the initiatil implemented. If at all, the only challenge to consider is whether the same partnership will be established with other banks. In sum, we can safely say that all stakeholders in the market will benefit from this move to modernize the process.”
Eng. Fahad Mohamed, Director - Dubai & Northern Emirates, Adeeb Group
During the peak pandemic period, certain companies even stopped accepting cheques and this caused various perplexing situations for tenants. Introducing the direct debit for rental payments is a commendable step by the visionary leaders of Dubai and the leadership team at the Dubai Land Department. This practice change will be a boon for many and a bane for few. Certainly, inconvenience is always part and parcel.
The post-pandemic era has acted as a major catalyst for adopting digitalization across the world. You hardly see cash being carried around as most people have moved towards using cards or even e-wallets for the simplest of transactions. Looking around the various countries that have abolished the post-dated cheque for rentals, Dubai has again taken it a step making it much more convenient and transparent for rental payments No development comes about without progressive changes and this step is a milestone for Dubai and its real estate market.
