Put Dubai rent cheque in landlord's name or face Dh500,000 fine and jail

If you are looking at renting a house in Dubai, ensure you are issuing cheques in the name of the unit owner only.

Taking a tough stand on property management companies, the Dubai Land Department (DLD) has issued a circular, warning them of not taking any rental payments (cheques) in the company’s name.

The circular, issued in August 2015, states any violation of Law No (2) of 2003 that regulates the lease of property in the emirate could result in imprisonment and a fine not exceeding Dh500,000.

The move follows cases previously reported of property management companies taking rental cheques in their own name and cashing them, thus failing to pay the landlord on the due payment dates.

The circular mentions that to safeguard the rights of all parties and to comply with the laws governing the work of the real estate management and supervision companies, all companies must comply with the following:

- Licence and staff involved in property management and supervision, and the properties managed by the company, must be registered with Ejari.

- Management supervision companies aren’t allowed to receive any rental payments or cheques in the name of the company and all cheques must be in the name of the landlord.

“In the event of non-compliance with this circular with respect to the receipt of rent payments, the penalty contained in Law No (2) of 2003 applies (whosoever violates this law is subject to a penalty of imprisonment and a fine not exceeding Dh500,000),” the circular mentions.

In 2012, 'Emirates24|7' had reported that the Real Estate Regulatory Agency (Rera), the regulatory arm of DLD, sought changes to 2003 licensing regulations to ensure protection of landlords and tenants.

Among the measures discussed were doubling of the bank guarantee from Dh5million to Dh10 million for property management and leasing companies; the licensed company to have assets worth Dh10m; and giving Dh1m in a bank guarantee or being restricted to manage properties that were equal to the value of the bank guarantee.

However, these changes haven’t been incorporated as yet.

Read: New curbs on property firms to safeguard tenants, landlord

In order to ensure that renters are not duped, people need to verify the below information:

- Check the trade licence of the real estate company

- Check its approved activities according to its licence from DED

- Check registration number and the brokers’ licence from Rera

- All the above information can be found on DLD’s website: www.dubailand.gov.ae

- Get the rent contract registered on Ejari

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