Digital Payments for Rents
The game changing regulations that is now going to take the hassle of post-dated cheques out from the scene completely. Following the 10x initiative from the Government of Dubai, Dubai Land Department has partnered with Emirates NBD bank and reach out to an agreement where the bank would digitalize rental cheque payments through the UAE Central Bank’s Direct Debit System.
This implies that an online contract will be signed off, that will allow the bank to debit the rent amount on the specified date directly from the tenants account into the landlord’s account which has to be in Emirates NBD. From the recent pandemic, where the financial uncertainty in the region was at peak, many tenants had to rethink of moving out of their homes or revise the rental contracts because of the financial instability and the amount of PDC being bounced were significant in number.
These direct debits authorities and online digital payments would allow tenants to move out of these scenarios by utilizing bank’s cash in advance schemes or use credit cards to pay off their rents and not be bothered about the complications of bounced cheques. These regulations will help tenants and landlords to mutually agree upon the flexibility of the payments which conventionally has been 1 or 4 cheques in the industry. And subsequently, this concept is going to give a boost to long term rental as many new residents have to pay higher rents in short term rentals while waiting for the bank account to open and cheque books to be issued.
The next phase of this agreement is even bigger which would allow overseas investors looking to buy property in Dubai to be able to open a non-resident savings account going forward. This would assist in facilitating their property purchase in Dubai, and collect rent in a highly convenient way. Overseas property investors will have the support of a dedicated relationship management team to help them open their accounts.
For more information about Direct Debit System and to learn how digital payments are going to overcome the PDCs in Dubai, feel free to get in touch with our advisors at Homes 4 Life.
