How Can I pay my rental in UAE?
The rental markets in the UAE are rapidly developing from the last two decades. Although, rental prices are dipped down from the last two years but renting in UAE is still expensive. Expats almost spend nearly half of their earning in terms of rents alone. Moreover, since more and more expats are coming to the UAE, new constructions and housing developments are also going-on. Every year hundreds of new units joining the markets. Many companies offer to the house, but others only pay allowances in terms of rent.
When looking at renting in UAE, keep in mind Dubai is the most expensive city followed by Abu Dhabi and other states. Today, we're going to discuss the ways how that help pays your rentals in UAE.
RENTING IN UAE
Renting a property in the UAE is quite different as compared to other parts of the world. The stock of housing is pretty good, but if you're viewing this without worrying, they'll be taken by other tenants. All over in UAE, there is a fantastic array of rental agreements for expats.
There is no official data available, but almost 70% of the population is living in rented accommodations which mostly are expats. The process of renting in UAE is governed by the Real Estate Regularity Authority (RERA) through which the process of rental increments is very fair. Therefore, if you're feeling an unfair uprise, you have chances to make a batter deal. The country already surpasses the property needed to accommodate the expats. Therefore, you had many options to rent a property at very competitive prices. While the larger emirates are more expensive and can take up to 50% of your budget in rents, take your time until you find the best deal.
Apart from RERA, larger emirates like Dubai had approved real estate brokers to take your pain. If you're planning to hire a broker for your payments, it's good because by hiring a registered broker there are minimal chances of potential scams.
Pro Tip: Always see the registration card of broker you've chosen for the whole process, as their registration from RERA is necessary.
RENTAL PAYMENTS MEANS
Unlikely in many parts of the world, landlords in UAE rarely accept the payment methods in terms of the month; instead the rents should be paid in:
- In cheques
- Single Cheque or maximum of 6 cheques annually.
The ensure the safety to landlords that tenants will not leave within the short periods and will follow the rules of the contract.
Remember: "The cheque will be dated as the day the tenant is handed the access keys, and the landlord can cash the cheque on the same day".
CHOICES TO MADE: FURNISHED VS UNFURNISHED
Studios, Apartments, Villas, Penthouses, infect renting a luxury property always had the option to choose. Most people prefer to go to unfurnished places so that they can choose. Sometimes white goods such as appliances come with the property.
GENERAL RENTAL RULES AND PAYMENT REGULATIONS
One thing that might surprise many newcomers is that "landlords ask for hefty annual upfronts". You may ask for whole year rental cost in post-dated cheques which landlords will cash with an interval during the year. If in any other part of the world, you're paying monthly, then this might be a fascinating thing for you.
But, if paying these upfronts are a problem for you, then there are agents which might help you to find the landlords charging rents on a monthly basis. Another distinguished fact is that if the place that is already rented by somebody else that's might cause you a problem because the local laws don't allow unmarried males and females living together.
· LAWS AND RIGHTS
Once you've made your mind to rent accommodation as a tenant, you have rights and legal values. In most cases, tenancy contracts are very well protected. However, you have the legal right in rental agreements, but it's good to approve the deal with local authorities.
To ensure the legality of the contracts, you have to register the deal with "Ejari". Once you register, your agreement is protected under the laws of the land. Moreover, it isn't hard to register your tenancy online. By doing so, landlords cannot increase rents arbitrarily. A 90 days' notice is must, and rents are based on the "rental index" published by RERA. The legalization of the contract helps both; tenants and landlords. Therefore, keeping an eye on index issued by authorities means that you've got a warning regarding the payments that you're paying to landlords, either, its less or more them market index.
But if unfortunately, your landlord is not treating you well, you can contact the Rent Disputes Settlement Centre, where a specialist can help you to resolve the dispute.
· CONTRACTS AND DEPOSITS
In the UAE, the contracts binding is usually for one year. So, if you want to leave early, there is plenty to pay if you break the contract early. Both parties agree on contract rules as long as it adheres to general tenancy rules. So, ask if you need any changes before signing the contract.
Once, you've agreed on terms and conditions you will receive a blue tenancy contract by the broker and to make things more valid; you need to make process registered with Ejari (we discussed already). This blue contract from and an Ejari record should include the amount of deposit. Usually, this contract and registration will take four weeks, which also the time to reserve the property.
Pro Tip: Rents cheques should address in the name of the landlord. Therefore, always ask a copy of identity, and title deed before handing over the signed papers
While making the rental agreements here are some of the hidden cost that you have to pay this includes
- Agency Fee: 2 to 5% of the first annual rents.
- Ejari Feel: Dh 195 for all properties
- Housing fee: 5% of annual rents added to bills
- Security deposits: One-month rent (refundable)
· WHAT DOCUMENTS ARE REQUIRED FOR RENTERS
If you’re looking to rent a property for first time or want to start a new contract, then you have to prove the residency status, and identity to finalize the rental agreements. In most cases, you have to deposit the copy of your passports, and proof of your employment or evidence from your employer that your visa is under process. In some cases, if you're not paying the full upfronts that you have to prove the source of earning, which should be enough to cover the services and outstanding debts.
Here is a formal document checklist
- Emirates ID Copy
- Residency Visa
- Security deposit cheque: (5% In case of unfurnished and 10% in case of furnished property)
- Agency fee Cheque
SHORT-TERMS PROPERTY RENTALS
Finding and renting a place to live in the UAE is serious business, which needs financial as well as time commitments. As per expert advice, you need to give a few weeks of research before finalizing the decision. The good thing is that, back in 2015, the government of Dubai introduce short-terms rentals regulations. Short-term rentals contracts are suitable for both tenants and landlords. Moreover, these regulations were formulated to stop the illegal subletting of properties.
Although the regulation for short-term rentals is suitable for the owners but tenants, it's expensive compared to 1- year lease.
Pro Tip: Depending upon the seasons, the short-term rentals come with different prices. For example, in the high tourist season, the short-term rentals are also higher.
Short-terms haven't had limited options; you can choose from studio, apartments, townhouse, penthouse, villas, infect almost all kinds of properties. The important things to remember is that in this kind of rentals you have to rent a complete unit, not a small part of properties. Ejari systems do not manage Short-terms rentals, infect these contracts are managed by Dubai Tourism and Commerce Marketing (DTCM).
Writing outdated cheques of year in advance is the most traditional way for the rental payment in the UAE. It gives some relief to landlords in terms of payments and security, but on the other hand, it can cause a financial issue for tenants, especially for newcomers.
Nowadays, payments from 1 cheque request getting old, especially after Covid-19. Now the landlords are getting more flexible and making it easier for tenants to pay in monthly, bi-monthly and quarterly cheques. The payments from legal digital sources are now becoming the easy way out.
PAYING FROM ABROAD
As the expatriates mostly occupy the country, many of them frequently travel back to their home towns. Suppose you're on vacations and its time to pay rents or bills, try to renew the contracts by local bank account, otherwise your home bank might not offer you the best deals. Try to use services like Transferwire which allow you to transfer money using the real exchange rates, whereas the process is also very transparent leaving the whole process fairer, and cheaper and much faster than banks transfer.
NO MORE CHEQUES FOR TENANTS, PAY DIRECTLY
THE DIRECT DEBT SYSTEM
A Dubai based real estate company Asteco, one of the leading property management company, achieved another milestone by announcing "The Direct Debt System". Cheques are the primary source of rental payments, but now tenants can pay rents by direct debts; simplifying the process.
Recently announced, this tech integrated method to manage the payments of real estate are results of technology incorporation in the UAE property market. The method is good weather the payments are fixed or varied. Asteco partnered with National Bank of Fujairah and DDS to launched a digital system that is now successfully integrated with property management and apricated by many of the landlords.
Ajar (Kuwait Based Application)
Ajar started its operation in the UAE back in 2018. The application is now letting tenants & landlords send and receive online payment for free. Ajar's agents will contact both the parties and give them a receipt of payments, with no service charges, and no transaction fees at all. Currently, the application is used by more than 35,000 residents. Landlords can also provide temporary discounts for tenants, cancelling or postponing the rent payments as required. Also, landlords can allow tenants to pay the rental income into several instalments.
"We've noticed that many property owners are finding ways to avail the pressure of payments on the tenants and we're here to support that," said Shaheen Al Khudhari, founder and chief executive officer of Ajar.
Ajar's platform also offers the rewards platforms known as AjarRewards programme. The platform is partnered across Kuwait, and the UAE is giving tenants discounts, cash-back rewards and many other benefits like groceries, laundry, gifts and electronics, once they pay their rent online.
The Benefits of Paying Direct Debts
Post-dated cheques for rents are very common, yet they can cause an issue for tenants. Because paying in lesser incidences means tenants have to save large amounts for the cheques. The Direct debt systems made it easier for tenants to carry small payments with regular frequencies. That's why this system is considered as the direct relief for tenants.
For landlords, this system becomes a source of stable income, where they can receive payments in more regular frequencies. Many new developments are already offering the payments terms in more manageable monthly instalments, apart from higher annual payments. Direct Debts are secure for rental payments because it's a robust development with newer up-gradation and backed by the Central Bank of the UAE.
BE CAREFUL: NOT TO GET SCAMMED
You might encounter issues when renting a place in the UAE, like everywhere else in the world. However, the law is made to protect tenants only if your contract is registered and legal. But you have to be sensible before you sign the dotted line in blue form. To avoid getting scammed while in paying the rents. Here are a few things to remember
- Choose a reputable agent who is registered by RERA.
- Don't hand over any money without any receiving receipt.
- Always ask about the payments, what it's for.
- If you feel anything suspicious during the rental payments, then RERA is the place for you.
- The Authorities had much information.
Enjoy your living in the United Arab Emirates!