Picture used for illustrative purposes. Image Credit: Gulf News archives

Dubai: Instead of paying your rent in four or six cheques, tenants in Dubai will have the option to get the rent amount debited from their bank accounts, after the Dubai Land Department announced a new scheme earlier this month.

In the announcement, made on July 4, Dubai Land Department signed an agreement with Emirates NBD, which allows rent payments to be debited directly from a tenant’s account. The move is in line with Dubai’s paperless strategy and is aimed at making the process of rent collection easier for landlords as well as tenants. But what is the new move and when will it come into effect? Here is what has been announced so far.

How will the rent cheques be replaced?

In the announcement made on July 4, it was stated that rental cheque payments will soon be automated and digitised by enabling the collection of rent using the UAE Central Bank’s Direct Debit System (UAEDDS). UAEDDS, which was introduced in 2012 by the Central Bank, allows regular payments for utility bills, insurance payments, mortgage or loan repayments and subscriptions.


Why are rent cheques being replaced?

Not only is this initiative is in line with Dubai Government’s paperless strategy it is also part of the Dubai 10X initiative, which challenges government entities to embrace disruptive innovations. The move to replace rental cheques with a direct debit system is helpful for both landlords and tenants, according to DLD. By automating the system, landlords and property management companies will be able to eliminate administrative activities required to manage post-dated cheques manually. It will also offer an easy digital alternative to tenants and offer them the option to opt for flexible payment plans from their landlords or property management companies.

What is the Dubai 10X initiative?
Dubai 10X was launched by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai in 2017. He challenged all government entities to embrace disruptive innovation as a core operational process. The initiative creates disruptive, exponential change in government entities, placing Dubai 10 years ahead of leading global cities.

When will this decision be implemented?

The decision to start accepting rent payments through online banking requires landlords to make the necessary changes to their rent processing systems. Some developers and real estate companies and property agents are already allowing tenants to make digital payments for rents in Dubai. However, as reported by Gulf News earlier, the real estate and banking authorities are yet to specify a clear date as to when post-dated cheques will become a thing of the past in the UAE property leasing market.