A landmark agreement announced in Dubai that eliminates the need for tenants to submit post-dated rental checks is now in effect. The new system, announced earlier this week, “is readily available” and accessible to “landlords and tenants”, an Emirates NBD spokesperson told the Khaleej Times.

“Landlords can now obtain a one-time direct debit mandate signed by renters, allowing Emirates NBD to debit the rental from the renter’s account or credit card. Landlords can collect the rental using the automated system provided with the digital banking channel,” the spokesperson explained.

Under the agreement signed between the Dubai Land Department (DLD) and Emirates NBD Bank, rental check payments are automated and digitized using the UAE Central Bank’s direct debit system ( UAEDDS). It benefits landlords, property management companies, and tenants by eliminating the need to manually manage post-dated checks.

Annual rents in Dubai are usually paid in two, four or six installments via post-dated cheques.

How to benefit from the new service

The bank’s spokesperson explained the procedure for subscribing to the UAEDDS service:

“The owner should contact Emirates NBD and register for the service. Instead of cashing checks, the lessor will cash the direct debit mandates signed with the tenants and will register all of these mandates with the help of its guaranteeing bank.

When asked if the system only applied to Emirates NBD customers, the spokesperson said owners can sign up for the UAEDDS service with any bank that offers it.

“Emirates NBD is one of the leading banks with digital capabilities offering an end-to-end direct debit service. Landlords can sign up for this service through their account held with Emirates NBD. Renters can have accounts or credit cards from any bank in the UAE,” he added.

Is the new system mandatory?

According to the bank, UAEDDS can work “alongside” existing services used by landlords and tenants.

“UAEDDS is not a mandatory service; however, the system provides an automatic, hassle-free and reliable alternative to checks,” the spokesperson added.

When asked if the bank foresees a near future where rental checks will be phased out altogether, he said the Dubai government is considering paperless methods of doing business.

DLD had earlier said the solution offered a “seamless digital alternative for tenants to make rental payments using their bank account”. This will allow them to benefit from flexible payment plans from their landlords or property management companies.

Sultan Butti bin Mejren, Managing Director of DLD, said, “We have partnered with Emirates NBD in line with our efforts to fully digitize our services in line with Dubai’s paperless strategy. Such collaborations will help facilitate and streamline the processes involved in the real estate market by employing incremental machinations on the way to replacing the legacy systems in place.

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