propertyfinder.ae sums up everything a newcomer to Dubai needs to know about paying rent.
Type of rent
Most properties are rented on fixed-term contracts, meaning that both the landlord and the tenant sign a mutual contract which states the rules and responsibilities to be carried out by both parties. The term of the lease is typically a year from the start date, in which the landlord cannot vacate the tenant unless there has been a direct violation of the terms, and the tenant can terminate the contract but might have to pay a fine.
For a person to be able to rent an apartment on a fixed-term contract, he/she must have a valid residence visa. This is why newcomers to Dubai result to short term rentals until all their documents get sorted. Others prefer short term rentals (such as serviced apartments) because they don’t want to have a long term commitment with the landlord.
Unlike most cities in the world, landlords rarely accept monthly rent payments and instead demand rent to be paid:
- In cheques
- Either in a single cheque or 2-4 cheques
This provides landlords with the security that the tenant will not leave after a short period of time, and will follow the rules stated in the contract.
Additionally, there are other costs to be considered:
- Security deposit (5% of the annual rent)
- Agent’s fee (5% or 2000AED-3000AED)
In recent years, landlords have been demanding to be paid in one cheque, upfront. In order to encourage tenants to agree to pay a lump sum right away, property rental rates vary depending on the number of cheques paid, the cheapest being a one cheque payment.
Important note: the cheque will dated as the day the tenant is handed the access keys, and the landlord will probably cash the cheque on the same day.
Not everyone has an entire year’s rent available at their disposal, this is why many tenants result to multiple cheque payments. As mentioned above, paying in multiple cheques often means paying more, but it does help tenants avoid bank loans.
Important note: don’t expect a multiple cheque payment to get you out of your one year commitment, as the landlord will receive the cheques on the day he hands over the property and will cash the cheques on the stated dates even if you have decided to leave. A bounced cheque can land the issuer in jail.