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UAE Law Re: Inability to Pay Rent in Dubai

If you are scared you won’t be fulfilling your rent obligations in the following months, then don’t fret as you are most definitely not alone. One in five renters in Dubai say that they have fallen behind their rent payments due to the COVID-19 pandemic. Despite difficult times most people are experiencing, renters who are struggling won’t be put to jail as bounced cheques are no longer considered a criminal offense in all of the United Arab Emirates (UAE). Instead, bounced cheque for rental payments will be considered as misdemeanor and will only be subject to financial penalties. 

There are, however, exceptions to this as there are acts of a drawer which will be considered as crime punishable by criminal sanction.

Exclusive acts which you should avoid when you won’t be able to make your rental payments include:

  • Ordering your bank or any financial institution to not encash a cheque or a cash a cheque amount for a specific cheque beneficiary 
  • Closing of the bank account or withdrawing all available balance prior to the due date of the cheque. In addition, if the bank account holder or drawer has a dormant account from the time of cheque issuance but still issued a cheque, it’s considered illegal and a punishable by criminal sanction. 
  • Deliberately signing of a cheque in a specific way that precludes cheque beneficiary of cashing at the bank e.g. deliberately putting the wrong signature

All these are considered as criminal acts that trigger criminal liability for the drawer. Acts such as the aforementioned are fraudulent.

Options of Tenants Who Can’t Pay Rent  

You should not lose hope when you won’t be able to make rental payments temporarily as you have options. They are as follows:

  • Look into obtaining assistance – if you have been laid off or terminated from your job in Dubai due to the outbreak of coronavirus (COVID-19), apply for a personal or small business loan. There are bank loans, grants, and other types of financial assistance provided by private companies in order to assist those who have been affected by the recent pandemic. 
  • Free up money to make rent – during a crisis such as this, it goes without saying both shelter and food must be the top priorities. Liquidate some of your assets or belongings and do what you are capable of doing in order to pay for your essentials first. 
  • Examine your budget – if you have paid rents for the previous months but you think you won’t be able to cut it with the rent payment for next month, then look closely at your expenses. See if there’s a couple of areas you can get rid of. Perhaps you may have to take public transportation for the whole month in order to save up on gas or brown-bagging lunch in order to save some cash on restaurants. You may also want to pick up odd jobs to help you in staying afloat. 

Note: when you don’t pay rent when it’s due, your landlord has a right in depositing a rent cheque to the bank for collection. If a cheque you issued is dishonored by the bank, the landlord can file complaints against you.  

Bounced cheques in UAE of up to AED 50,000 will have a fine of AED 2,000. Cheques that bounce worth more than AED 50,000 to AED 100,000 will get a fine of AED 5,000. A cheque that is between AED 100,000 and AED 200,000 will attract a fine of AED 10,000. 

It is truly a misfortune not to make rent payments. It is advised that you speak with a seasoned lawyers in Dubai to know your options, most especially on dealing with complaints that are filed against you. Call us here in HHS Lawyers today!

Hazem Darwish

Hazem Darwish, is a Senior Partner of HHS Lawyers in UAE. Practicing law for almost a decade, he has in-depth knowledge on UAE legislation with particular expertise on legal drafting, contract drafting, labor disputes, family law, and regulatory compliance for business organizations. Hazem Darwish also provides counsel on legal rights and obligations in the UAE to clients, including individuals and businesses subject to investigation or prosecution under Criminal Law by major regulators.