Dubai: With the end of a lease and the handover of the property keys, a tenant’s relationship with the landlord or property management company does not necessarily end. Another phase begins involving the return of the rental security deposit paid at the start of the contract.
Tenants have complained about waiting weeks for deposits to be returned and about deductions for painting, cleaning and maintenance, as well as additional charges or deposits sometimes associated with removing furniture from the property.
They cited a lack of clarity over deposit refund dates and deductions for maintenance and renovation work, particularly when it is difficult to distinguish between normal wear and tear and damage for which the tenant should bear the cost.
They also raised concerns about additional financial demands related to furniture removal, questioning the basis for such charges and whether they are covered by the terms of the lease agreement.
Tenants proposed creating an independent fund into which security deposits would be paid when lease contracts are signed, rather than allowing the landlord or property management company to retain the money. The fund would manage and safeguard the deposits throughout the contract period and return them to tenants when contracts expire, after settling any outstanding amounts or deductions supported by technical reports and approved invoices.
Real estate experts said the security deposit serves as a guarantee for the rights of both landlords and tenants. They stressed the need to document the condition of properties at handover, identify any damage and establish repair costs through clear technical reports, while ensuring tenants are not charged for normal wear and tear or renovation costs.
They said security deposits typically amount to 5% of the rent for residential apartments and 10% for commercial units, with any remaining balance usually refunded within seven working days under established procedures.
Deposit refund
Tenant “H.K.”, who preferred not to give his name, said: “The problem was not in paying the security deposit when signing the contract, but rather in the time it took to get it back after leaving the property.”
He said some tenants may have to wait weeks to receive their money, adding: “The lack of a clear and specific date for the return of the deposit keeps the tenant in a state of waiting, despite the end of the rental relationship and the handover of the unit.”
He proposed creating an independent fund into which tenants’ security deposits would be paid when lease contracts are signed, rather than allowing landlords or property management companies to retain the money.
The fund would manage and safeguard the deposits throughout the contract period and return them to tenants when contracts expire, after settling any outstanding amounts or deductions supported by technical reports and approved invoices.
He said such a mechanism would ensure that deposits are held by a neutral entity, reduce disputes over delayed refunds or deductions made without clear justification, and strengthen confidence among tenants and landlords in the rental relationship management system.
Tenant “M.H.”, who also preferred not to give his name, said he was surprised to find deductions from his security deposit for painting, cleaning and other work when leaving the property. He questioned where the dividing line lies between normal wear and tear and damage for which the tenant should bear the cost.
“The problem lies not only in the deduction, but also in knowing the basis on which its value was determined,” he said.
He explained that property handover procedures can sometimes lead to additional financial claims, particularly when tenants are charged for painting, cleaning or replacing materials.
He asked: “If the property has been used normally, how can it be determined whether it is normal wear and tear or damage that warrants deduction from the deposit?”
Another tenant, “T.A.”, who preferred not to give his name, said some tenants face additional financial demands when moving out, including charges related to removing furniture or what is described as “furniture moving insurance”.
He questioned the contractual basis for such charges and whether they are separate from the original security deposit.
Clear terms
Ismail Al Hammadi, founder and CEO of Al Ruwad Real Estate, said such cases exist in the market and can develop differently depending on several factors, particularly the absence of clear, agreed terms and conditions governing the handover of units.
“Addressing these cases requires clear procedures, beginning with documenting the unit’s condition upon handover and receipt, providing evidence of the reasons for the deduction and its cost, and setting a binding deadline for refunding the security deposit,” he said.
He added that when a dispute concerns only part of the deposit, the entire amount should not be withheld.
“The security deposit in the rental relationship is supposed to be a guarantee of the rights of both parties, and not an additional cost to the tenant or a means of pressure when the contractual relationship ends. The owner has the right to recover his property in good condition, and the tenant has the right not to bear the cost of renewing it for the next tenant,” Al Hammadi said.
He explained that a property rented for several years will naturally show signs of use, which should be taken into account when calculating deductions.
He stressed the importance of clear and well-regulated rules that protect landlords against unjustified damage while also protecting tenants from unjustified deductions or delays.
Al Hammadi said real estate management companies and brokers have an important role in regulating these practices. The quality of rental management, he said, is measured not only by the collection of rent but also by how contracts are terminated, how the rights of all parties are protected and how smoothly tenants can exit the rental relationship without disputes.
Such practices, he added, support transparency in real estate services and strengthen confidence in the market.
Property type
Mohammed Turki, real estate manager at Al-Waleed Real Estate Group, said the value of a security deposit is usually determined according to the type of property.
He said deposits for residential apartments amount to about 5% of the rental value, while those for shops and commercial units can reach about 10%.
Turki said a property is usually inspected at the end of the lease by the real estate company’s technical team. The team assesses any damage and prepares a report or inspection form detailing the damage and the estimated repair costs.
The tenant is informed before repair costs are deducted from the security deposit and the remaining balance is returned.
In cases involving significant damage or a dispute between the landlord and tenant over its value, Turki said a neutral technical report should be obtained.
“The competent authorities can send a technical expert to inspect the property and determine the extent of the damage and the cost of repairing it,” he said.
He explained that an expert affiliated with the competent authority becomes particularly important when the value of the damage is substantial or there is disagreement between the landlord and tenant. The expert can inspect the property and prepare a report identifying the damage, helping to resolve disputes and avoid differences in valuations.
Turki said security deposits are usually refunded within seven working days of vacating the property, or within seven working days of the tenant submitting the final electricity bill, depending on the procedures followed.
Inspection report
Rafiq Matar, general manager of Al Mutamayez Real Estate, said security deposit amounts vary depending on the type of apartment.
He said they generally range from Dh2,000 to Dh3,000 and may reach a maximum of Dh4,000, depending on the type and condition of the unit.
When financial claims arise at the end of a lease, a maintenance company is hired to inspect the property and prepare a report detailing any problems, including those involving the kitchen, paintwork, ceramics or other parts of the unit.
Matar said the inspection report identifies damage to the property and should distinguish between normal wear and tear and damage caused by misuse.
Normal wear and tear applies when an apartment is left in a clean and acceptable condition, he said, while clear damage could include broken kitchen components, fallen hinges or damaged ceramics.
The maintenance company assesses the extent of the damage and determines the repair cost, which could amount to Dh500, Dh1,000 or Dh1,500, depending on the circumstances. The amount is calculated according to invoices and the actual cost of the required maintenance work.
Matar said tenants can obtain an invoice detailing repair costs, helping to establish what constitutes normal wear and tear, what costs should be borne by the landlord and what should be borne by the tenant.
He said settlement of the security deposit should take place shortly after the maintenance report is issued. In cases where there are no disputes, the process could take about a week, or follow whatever timeframe has been agreed between the landlord and tenant.
There is no single, fixed market-wide standard for inspecting properties and determining deductions, he said, with assessments varying according to the condition of each property.
Matar said the inspection and settlement process should ideally be completed within a week to 10 days, provided there are no disputes. Once the tenant and landlord agree on the cost of damage or maintenance work, the remaining security deposit can be refunded or any outstanding amounts settled between the parties.
He added that reaching an amicable settlement remains the preferred approach, allowing disputes over deposits and maintenance costs to be resolved without escalation.
In brief
The security deposit is intended to guarantee the rights of both landlord and tenant. The property’s condition should be documented at handover, with damage and repair costs established through clear technical reports.
Tenants have raised concerns about a lack of clarity over deposit refund dates and deductions for maintenance and renovation, particularly where it is difficult to distinguish normal wear and tear from damage for which the tenant should pay.