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Hyper-inflationary rental increases in Dubai’s housing sector is giving tenants a frightening trend of year-to-year lease agreements. An increasing number of consumers who now live in the middle-income area now desire a payment scheme opposite to the current arrangement due to the increasing amount of money they are obligated to pay. These days, many tenants chose bi-weekly, direct debits, trying to settle on the most suitable money management technique. Although all these questions will be raised, such potential solutions will encounter some obstacles for massive implementation in neighborhoods.

The Inclusion In Monthly Auto Charge

Now, tenants are talking to their landlords to allow them to pay rentals through monthly direct debit after RERA Rental Index after it issued rent regulatory orders across all states and cities in the next fiscal year which resulted in a higher hike in rents.

The entire procedure is conducted through the bank account of the tenant since it eliminates the need for making payments through mediums such as cheques or cash, making it a convenient process for both parties. While this phenomenon mostly happens in these low-priced neighborhoods where residents’ monthly stress has been caused by monthly rent changes.

Monthly Payments: An Answer To A Budget Query

In order to solve the problem with rental payments, which ask for a substantial amount in check submission time, rents should be deducted monthly from the tenant’s account obviating the need for sufficient funds to make a check. The situation is getting worse with every passing day and the tenants and the landlords’ relationship is going down the drain and also landlords’ credit scores at times get reduced by these bounced cheques which is a huge setback for the landlord. It should not be a blowout for UAE bounced cheques international bank communication happens, so tenants are trying to find secure alternatives.

Direct Debit System’s Perspective

The Managing Director of the Direct Debit System Ummair Attallah declares that the expatriates in Dubai off plan who constitute about 96% of the Emirates’ population working in a month-to-month wage system should be subjected to the emulation of the payday cycle as accurately as possible by the direct debit system. Along Butt by allowing people to have tax write-offs every month, redounds in bounced checks payments wounding by 30%. This way the day-to-day existence can be sustained by rising prices.

From the landlords’ side, data collection is challenging as individuals are unwilling to share data without understanding the benefits and their concerns towards privacy.

●  While some off plan property Dubai owners are introducing twelve-pay plans to give more options or monthly automatic debit, in fact their number remains very low.

●  The emotional guards are issued by tenants for the tenants that have a look of conservative perspective regarding landlords.

●  As per Usman Jameel’s reflections, more adept millennials have opted for e-transfers or direct debits, whereby payments are made automatically from their bank accounts to the merchants’ bank accounts.

●  While housing experts believe that it could take a long time due to the fact that landlords have developed a physical check as the tool of payment; they want to take time and get used to a new system of paying.

Concerns & Priming Facets For Uptake

One of the aspects that landlords might have to deal with if they were to implement the direct debit system is that despite its pros, it might not be easy to roll it out. Through this categorization, the term ‘debt factoring’ and groups that may not otherwise have access to credit can be catered for through the ‘legal alternatives’ to cheques. By side-stepping an accountant, the buyer is bypassing a key person who would flag the conflicting legislation in the agreement.

Cost Implications For Landlords

Digital options can be something that doesn’t work for landlords because they care for costs so much. Furthermore, the respective fees on credit card payment charges are 2% for credit cards purchases and Dh7 at one go payment for the same. Even though the check processing fee is being charged, they are safe options both for the landlord as well.

The Bottom Line

The real estate companies in Dubai are furthering its claim as tenants are listing down monthly direct debits alongside their salary checking account as a way of sorting out their fluctuating rental charges. Despite the fact that obstacles and conventional thinking are still in place, the rental payments are expected to enter into a gradual transformation and eventually, the threshold of change may be beaten down. It will take us a few years to know whether this feature of monthly direct debit will become the norm in real estate firms in Dubai that is evolving whether sentimentally or physically.