40pc rise in rent cheque bouncing

DUBAI/SHARJAH — The recent rent increase in the UAE has created problems not only for tenants but also for real estate agents, who complain of cheques bouncing as never before.

Asma Ali Zain

Published: Sat 4 Mar 2006, 9:23 AM

Last updated: Sat 4 Apr 2015, 7:25 PM

Real estate agents say that there has been a 40 per cent increase in rent cheques bouncing, as compared to the same scenario earlier. A survey, carried out by Khaleej Times, revealed that the rent increase had left both residents and real estate owners high and dry.

“Compared to the payment scenario in the market some months ago, most payment cheques made by the residents to real estate owners now are not entertained by banks,” says Vinod S., Operation Manager of Shamma Real Estate. “This new trend is creating a difficult situation for us,” he added.

Another real estate representative, who wished to remain anonymous, said, “If a cheque bounces, it is an offence in the UAE. But that does not make us any happier, because if a tenant is jailed for a dud cheque, our money is stuck for a longer period!”

He also said that the ratio of cheques bouncing had increased drastically over the past one and a half years. “We have no option but to let tenants stay and pay in instalments. If we get the apartment evicted forcefully and allow other tenants to come in, we do not get our money and who knows the new tenant might also give us dud cheques,” he explained, adding that there was no replacement for cheques as the market demanded that payment be done only through cheques and not cash.

Vinod also explained that normally if the tenant did not pay up, they waited a week before issuing a notice. “If the tenant does not still pay up, we then forward the case to police and leave it upto them to get us the payment in cash. We avoid evicting the tenant ourselves without informing the police. But if the tenant acts really smart, we then cut off the electric and water supply as the last resort,” he added.

Ram Gopal, manager of a well-known real estate office, explained that sometimes in case the tenants were unable to make payments that month, they informed them not to deposit the cheques and make payments in cash instead at a later date.

Fareed Khan, who has rented an apartment in Ajman, said, “To adjust my budget, I have moved further in the emirates from Dubai to Sharjah and now to Ajman though it has not made any big difference in the rent payments.”

He also said that though he made his payments on time, several of his friends were unable to do so.