Ahmed Al Suwaidi of DHAM
Ahmed Al Suwaidi of DHAM said, "The direct debit option is just gaining traction and people will need time to familiarize themselves with this shift." Image Credit: Supplied

Dubai: A majority of tenants in the UAE still rely on handing out cheques to their landlords as part of their lease agreements. That decades old practice is coming to an end, as the UAE Central Bank pushes for direct debits as the de facto practice.

But the biggest landlords in the country have already moved beyond cheques, provided the tenant is agreeable to chucking the cheque as the transaction mode. And there are few bigger than Dubai Holding Asset Management when it comes to being a landlord. Ahmed Al Suwaidi, Managing Director of Residential Communities at DHAM, runs through a checklist of what’s been achieved – and what can be done further – in the transition from a cheque to just taking it out of the bank account.

You were among the bigger landlords to allow replacement of cheques with direct debits. What’s been the take up rates in your communities?

Over the past two years, our portfolio has welcomed a diverse tenant base - from families with children and couples to young professionals and corporate clients. Part of why we launched the DubaiAM Life digital platform and app was to help us better communicate and connect with residents.

The uptake of direct debit payments is growing steadily across our communities, demonstrating that people are increasingly realising the associated benefits and convenience of a digital solution. As of December 2021, more than 21 per cent of our residents opted to pay completely cheque-free using our digital solution. In fact, in H1-2022, app-based transactions made up nearly 87 per cent of the payments. That has been the fundamental purpose of the digital solution – to enhance our residents’ overall quality of life. Along with the option to make digital rent payments, the app also allows them to move in or out of their residences, register with utility service providers integrated within the app, raise maintenance or community care requests, enquire about leasing and learn about any events or activities we are hosting in their communities.

Do you still take cheques if the tenant insists? How about credit card deductions?

The option to pay via the app was introduced upon launching the DubaiAM Life app in 2019. The great thing about our system is that cheque-free rent payment is optional – each resident can choose the payment method that works for them. Residents can use post-dated cheques, a credit or debit card, or pay their first instalment by card and the remainder using post-dated cheques.

Stock - Bluewaters
Uptake by tenants for direct debt at Dubai Holding Asset Management communities is growing at quite the pace.

One question that has other landlords in a bit of uncertainty is what about the ways to make the tenant pay if any payment is missed. In your case, do you have clear penalties spelt out in the Lease Agreements?

We employ multiple channels for periodic reminders to ensure our tenants are aware of upcoming payments and have a full understanding of the terms around payment deadlines. For any circumstances where payments are missed, we remain connected with our tenants to comply with the agreed terms and conditions.

Are you working on any fail-proof processes to make such misses as negligible as possible?

We’ve designed the app and the direct debit journey in such a way that it reduces any hurdles to making payments. The flexibility of these options allows residents to better manage their cashflow in advance, too.

As soon as residents begin their lease renewal process, we lay out the entire process so that they know what to expect and receive a breakdown of all costs before choosing one of three payment options.

Residents can sign the renewal directly on the app using UAE Pass or download, print and sign the proposal themselves. They can also choose to have the document delivered to and subsequently picked up from their homes by simply choosing the date and time for the courier to swing by. Once the process is complete, residents can locate the documents on the app for future reference.

The thinking behind such a straightforward and convenient process is that it encourages and enables people to complete their payments on time, reducing any stress and penalties.

Has Dubai Government set any particular timeframe for landlords to wean out cheque-related payments?

The direct debit system can currently run in parallel to existing payment options. The objective is to steadily make residents accustomed to the digital process and experience first-hand how much more transparent, convenient and secure this process is.

However, like many other industries, I am sure this digital transformation will continue to eliminate physical documents over time in line with the government’s vision for paperless business practices.

Do you collect rents via crypto?

The direct debit option is just gaining traction and people will need time to familiarize themselves with this shift. Most industries are keeping an eye on the developments in crypto to assess when it is suitable for them to implement this technology.

Rents in Dubai are on the march - have you capped any increases at your communities to within a particular range?

Dubai Holding Asset Management manages a diverse portfolio of communities, from family communities at Ghoroob and Shorooq to premium addresses at Dubai Wharf and Bluewaters, which means that the rental market and consumer demand impact our communities differently. We align any changes in rent as per RERA’s permissible rates to protect the rights of our tenants. We have seen an increased demand in some asset categories compared to more stable demand in others.