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Paying rent by direct debit in Dubai 2023

  • Better Informed
  • 15 Feb, 2023
Paying rent by direct debit in Dubai 2023

In many parts of the world, it has become a rarity to use cheques as a method of payment, with rental payments most commonly made via a monthly direct debit.  So, if you are an ex-pat to Dubai, you may have been surprised to see that it is still standard practice to pay rent by giving post-dated cheques to your landlord. But, as you would expect from such an innovative, ever-evolving city, that could soon be a thing of the past. 

Thanks to a new initiative by the Dubai Land Department, tenants can now pay rent via direct debit through the Ejari system. 

 

How can you pay rent via Ejari Direct Debit?

The Dubai Land Department has worked in collaboration with the UAE Central Bank to create the Noqodi Ejari Direct Debit Service. Ejari is now fully linked to this system, allowing tenants to make rental payments with direct debit via Ejari. A new Direct Debit System manual outlines the process for signing up for the new system. Both the tenant and landlord will need to register, and the tenant will be required to sign an authorisation form to permit instalment payments from their bank account. 

The Ejari Direct Debit system can be used either when setting up a new tenancy agreement or at contract renewal. At this time, the tenant and landlord will agree on the number of recurring payments that will be made during the tenancy, much like with the current post-dated cheque system. This means that there is still flexibility in terms of the number of payments that a tenant will make. This means that the Ejari Direct Debit can be set up to take the rent in 2, 4, 6 or 12 instalments. At this time, the frequency and date of payments cannot be changed once agreed upon between the tenant and landlord, however, this added flexibility is expected in future. 
 

What are the benefits of the direct debit system?

The new Noqodi direct debit system will have significant benefits for tenants, landlords and property managers. It will massively modernise and streamline the rental payments system. Tenants will no longer have to worry about presenting physical cheques, their signatures matching every time or not having a chequebook. It also eliminates any worry amongst tenants about whether their cheques will be stored securely whilst they wait to be cashed. For landlords and property management companies, the direct debit system eliminates any need to have a system in place for storing physical cheques and ensuring they are deposited at the correct time. 

 

What happens if a tenant misses their payment?

Just like with cheque payments, the direct debit system requires the tenant to have sufficient funds at the time at which payment is taken. If a direct debit fails because of an insufficient account balance, then Noqodi will attempt to take the payment three more times. If all attempts to take the payment failed, the tenant will be contacted. Just like with cheques, if a tenant fails to make payment via direct debit, then legal action can ensue. 

 

Can you still pay via cheque? 

Yes, you can still pay your rent via cheque. It's probably going to take some time for the new direct debit system to be adopted by landlords and property management companies. But, it is expected that post-dated cheques will gradually be phased out, with the majority of rental payments being made by direct debit in future. 

 

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