Abu Dhabi residents want monthly rent payments

Faced with sharp hikes in house rents year after year, Abu Dhabi residents are seeking to be allowed to pay their rent on monthly basis, according to a report in the Arabic daily newspaper ‘Emarat Al Youm.’

Tenants currently have to pay their annual house rent in just one or two instalments, which they say puts a heavy burden on their finances.

According to tenants, house rents have been hiked by as much as 100 per cent in some places and it is almost impossible to keep such large sums of money ready for payment of annual rent in just one or two instalments. They say they are often forced to borrow from banks or relatives and friends to pay annual rent on time.

Tenants complain that most house owners insist on being paid annual rent in just one or two instalments, with a few allowing three instalments at the most, even for which some extra rent in charged.

Meanwhile, a real estate expert welcomed the idea of monthly payment of rent as it reduces the burden on the tenants while also ensuring that landlords get their dues.

A legal adviser said the rent contract will have to be amended to allow change in the payment mechanism.

However, two landlords turned down the monthly payment system, claiming that this would make it more difficult for them to meet their commitments to banks and building maintenance firms.

Samir Abdel Hadi, a tenant, said monthly payment of rent would help to meet his financial obligations more easily. Paying as much as Dh120,000 in one go places a very heavy burden on tenants, he said.

He said he was forced to borrow from a bank at a high interest rate to pay his annual house rent. Two years ago, paying annual rent in one instalment was less difficult since it was Dh75,000.

Abdel Hadi demanded a law that limits house rent increases and allows easier options for payment of rent.

Ashraf Sami, another tenant, also wanted rent payments to be made in monthly instalments.

He said most landlords want payment in just one for two instalments. Those who reluctantly agree to three instalments are demanding a 2 per cent hike in rent, he added.

Ashraf Sami said that he tried to convince the owner to allow him to pay rent monthly after it was hiked by 100 per cent in the past two years. The request was rejected despite rent hike from Dh50,000 to Dh75,000 in 2014 and to Dh100,000 this year, he added.

He said he tried to change house but gave up after finding out that rents had been hiked everywhere. Also, the present house was closer to his office and his children’s school.

House change also means paying for shifting furniture and paying the house agent’s commission, increasing the financial burden further, he added.
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Hassan Fadhel, another tenant, said he could not pay the first of the two instalments of Dh55,000, after  the recent rent hikes in the UAE capital. He said he had to borrow from friends and relatives to pay the first instalment. Payment of rent every month would ease this burden, he added.

He also sought a return to the previous system which limited the annual rental hike.

Landlords reject proposal

However, Saeed Mohammed, a house owner, rejected the idea of monthly rent payment. Collecting of the total amount at once enables landlords to meet their liabilities to banks and maintenance companies, he added.

He added that collection of rent every month is great an uncertain process, unlike a post-dated cheque for one or two instalments.

Humaid Al Mansouri, another landlord, also expressed his dissatisfaction at the call for adopting monthly payment of house rent. Monthly rent collection would make payments to banks and maintenance companies more difficult, he added.

He claimed that despite the increase in rents, landlords’ incomes had not risen much because owners of old buildings have to spend more on renovation and maintenance.

However, Masaoud Al Our, a real estate expert and owner of the Al Waseet Real Estate Company, called for payment of rent on monthly basis.

He added this mechanism was in place in many countries in the developed world and this would ease the burden on tenants while guaranteeing the house owner’s rights.

Emad Saeed Othman, a lawyer at the law firm Dr Ibrahim Al Mulla, said that if ‘pacta sunt servanda’ is specified in the contract, payment of rent in one or two instalments becomes mandatory for the lessee.

He added: ''If tenants want to pay  monthly, they must change the contract or get the written consent of the lessor or make an addition to the original copy of the contract with the landlord's signature on this amendment.”

Nader Hassan, executive director of Skyline Real Estate Brokerage, confirmed that tenants have pay in just one or two instalments in 95 per cent of the buildings in Abu Dhabi.

He said a few landlords and some real estate agents agree to accept rent in three or more instalments but for which they demand an extra 2 per cent hike in rent.

He pointed out that it is difficult to convince house owners to make their contracts allowing monthly payments because some buildings are mortgaged to banks, resulting in large financial obligations. It would be reasonable to make payment in a few cheques, he added.

The hands of landlords have been considerably strengthened after abolition of the ceiling on annual rent increase, he added.

 

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