Renting a property and the payment system

Renting a propertyImage Credit: Supplied

Rental cheques, security deposits, viewing deposits, commissions… the world of real estate deals has so many payment aspects to it that one can easily get confused as to how much money one has to pay in totality. This can result in under-budgeting.

Some real estate agents have been known to ask for a deposit for a viewing of the apartment or house. This is not a common practice in the UAE because tenants would prefer not to deal with agents who ask for viewing deposits; however, some may be amenable to pay for the same. 

It is, however, common practice for a prospective tenant to pay the agent a commission once they come to an agreement in renting a property. 

A tenant also has to pay the landlord a security deposit which acts as a guarantee against damages to the property. A security deposit (refundable) is usually equal to one-month rent. This deposit should be lodged with RERA. The landlord is obligated to return the deposit within a reasonable period of time at the end of the tenancy if no repairs are required. 

It is also important for both parties involved to clarify at the very outset what will be construed as “damages to the property.” While some landlords are alright with the tenant drilling holes in the wall for curtain rods, others consider it as a form of damage to the property. Usually, issues like too many holes in the wall, broken window panes or frames, bug infestation, and extreme filth can result in the landlord withholding the deposit.

The average number of cheques that a tenant is expected to give can range anywhere between two and six, though four is the norm. The first cheque, which is usually for three months, is dated while the other three are post-dated. On rare occasions, some tenants are faced with one-cheque arrangements. 

While many people would like to see Dubai move towards the 12-cheque system like in many other parts of the world, that is not a very common option here.

Handy Hints
• A security deposit acts as a guarantee against damages to the property
• A tenant must clarify with the landlord what constitutes damages in renting a property
• The number of cheques can range from two to six, with four as the norm here




Source: Binu Sivan, Special to Properties
The writer is a freelancer


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