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August 16, 2023

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Facing Challenges With Security Deposit Refunds in the UAE?

Published in: The National | ProPakistani

Rules differ in Abu Dhabi and Dubai, but help is at hand to resolve disputes

The thorny issue of recovering a deposit from a landlord when moving house can be a tricky one to resolve.

Due to the recent increase in rents across the country, but particularly in Dubai and Abu Dhabi, a 5-10 per cent deposit usually paid on renting out a new home can easily top Dh10,000.

That hard-earned cash is often retained by some unreasonable landlords as a formality to cover the costs of repairs and maintenance to prepare the property for re-rental.

But before walking away, tenants should be aware of their rights to recover at least some, if not all of their deposit first.

The Rental Disputes Centre in Dubai and the Abu Dhabi Rent Dispute Settlement Committee are well placed to fairly resolve any disagreements between landlord and tenant, but steps can be taken well in advance to avoid the need for a lengthy and expensive court case.

How can I give myself the best opportunity of recovering my deposit?

A tenancy agreement is a legally binding contract between a landlord and tenant, so before signing any document be fully aware of what you are committing yourself to.

If unsure of any contract addendums that may require specific attention, then ask a property agent or friendly lawyer, or consult free of charge with an official body such as RERA as per the legality of any added clauses.

It is important to take plenty of photographic or video evidence of the state of a property on accepting keys to a new home – this will make any disputes in the future easier to resolve.

Any faults should be reported immediately to the managing agent or landlord with supporting photographic evidence.

Keep records of any maintenance required to rectify issues.

When you have a moving out date, it is a good idea to meet the landlord or agent to agree on what repairs or maintenance may be required, allowing for normal wear and tear.

Not all properties will need to be fully repainted on vacating, and often depends on the length of stay – so it’s worth checking the terms of your contract.

Follow up any discussions with an email so there is a record of any such agreement.

Maintain good terms

It is important both parties agree on a contractor to complete any required work, so there can be no dispute once complete and the deposit is due to be repaid.

Obtaining three separate quotes for remedial work and agreeing on an average price is a fair way to agree on costs.

All bills must be settled before vacating and do not leave any unwanted furniture behind or this could incur extra costs deducted from a deposit.

Once all your belongings have been moved from the property, it should be professionally cleaned and ready for handover. Remember to check all cupboards and outdoor storage for anything left behind in error.

When you are ready to leave the property, agree on a date to hand over the keys and a date for a final inspection.

This is where disputes can arise, so be sure to take plenty of photographs and videos on departure that can be compared with those taken on moving in.

If there is a dispute, keys can be handed to Real Estate Regulatory Agency (Rera) first before a deposit is released.

How much will it cost to resolve a dispute?

Typically, it costs 3.5 per cent of the annual rent of a property to open a case with the Rental Disputes Centre in Dubai, up to a maximum of Dh20,000 ($5,445) and at least a fee of Dh500 ($136).

Administration costs are added on top, of around Dh320 ($87).

Supporting documents including all photos, videos, maintenance bills and correspondence between landlord and tenant can be uploaded to the Dubai Rest online portal once a case is submitted.

“In case the landlord refuses to refund the deposit, the tenant may file a case before the rental dispute centre to claim his deposit back,” said Dr. Hassan Elhais, a legal consultant at Al Rowaad Advocates in Dubai.

“If the landlord wishes to deduct any amount from the deposit, the landlord may need to file a counter case to claim such deductions against the security deposit.”

A court-appointed judge will be assigned to make a decision on the case, usually via an online conference call with both parties or their legal representatives present.

If the judge’s decision is appealed or is unable to make a decision, the case can be sent to a closed committee hearing.

“If the tenant is the claimant, then they would need to provide their tenancy contract, payment proof, any correspondence, notice exchanged between parties, and handover acknowledgement, if any,” said Dr Elhais.

“Upon expiry of the tenancy contract, the landlord may prepare a report to indicate any damages.

“However, the tenant may dispute the same, and the final decision will rest with the rental dispute centre that may appoint a court staff to visit the premises to prepare a report.”

Both parties are usually then notified of the decision via email, with any payment orders sent to the losing party to settle any outstanding monies owed.

The process can take up to 30 days to resolve.

In Abu Dhabi, the process is entirely conducted online via the Abu Dhabi Judicial Department website.

All supporting documents must be uploaded to the online portal, including copies of rental agreements and a completed Rental Claim Form.

Tenants in Abu Dhabi will need to submit their original RDSC application, original petition, passport copy, tenancy contract and original power of attorney if acting on behalf of another.

Fees are capped at Dh10,000, or 4 per cent of the total annual rental amount.

It is a closed hearing, where a judge will make a decision and issue a payment order within three days to refund a tenant’s deposit.

If a landlord refuses to pay, the case can be submitted to the Judicial Department’s enforcement department which will issue a notice to pay within 14 days.

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