Dubai has suddenly become very expensive for its residents. Renters are finding ways of coping since rents seem to have gone through the roof. One such solution has been to request that rents be paid in turns rather than all at once.
Why Are Tenants Opting for Multiple Payments?
In the past, one of the rental practices in Dubai where tenants used to stay was the annual payment of the entire rent. Nevertheless, with prices in certain locations increasing by 20% or more, this notion is becoming difficult to implement. Consequently, in order to ease the situation, tenants are requesting landlords whether the payments would be made in a few smaller parts, say after every three months or even after every month.
“This trend suggests that despite rising rental prices, tenants are willing to pay these amounts when offered flexible payment options, as they seek to live in premium, high-quality communities. This further indicates the rise of liquidity in the market, mainly fuelled by new residents relocating to Dubai,” said Lewis Allsopp, chairman of Allsopp & Allsopp.
The Catch: Higher Rates and Fees
If you opt for a multiple payment plan, think of the worst case scenarios. The landlords may require a higher amount of security as well as place stiffer restrictions on late payment clauses.
A property manager remarked, “Landlords are becoming more selective on who they let their property to.” “As payment cycles become shorter, the chances of payment defaults increase hence landlords are more careful.”
How It Affects Tenant-Landlord Relationships?
This emerging development is altering the nature of the interactions between landlords and tenants. More regular payments, in turn, demand more regular communication.
What the Government Is Doing?
This is a trend that the government of Dubai is now looking into as well as its effects. There is a rising demand for clearer regulations regarding these payment schemes to ensure that both the tenants and the landlords are well protected.
These arrangements should be regulated by the government in order to ensure that they are balanced and unambiguous, stated a real estate law practitioner. “Absence of such rules would result in conflicts and it wouldn’t safeguard anyone’s interests.”
The Bottom Line
With the transformations in Dubai Real Estate, it is most likely that many people will prefer to use multiple payment plans. While this helps in managing expenses, it is imperative for renters to be aware of the disadvantages that this approach poses – for instance, increased charges and enforced regulations.
On the one hand, providing flexible payment schemes to tenants can help landlords attract more tenants. However, this also has its challenges. Therefore, it will be important to strike a balance as this trend develops.
Ultimately, more precise directions from regulatory authorities would be beneficial in making the entire rent-related dealings more equitable and transparent to all the participants.
