11/11/2024
Rental transactions, nowadays, are usually done in multiple payments. Thus, cheques are issued by tenants to landlords. It's the most common way of setting rental payments here in the UAE. But what if tenants weren't able to have enough funds on the agreed deposit date stated on issued cheques? This is where bounced cheques occur. What to do if rental cheque bounced?
Bounced cheques recipients have the right to file complaint in police station against issuers. Case will be forwarded to public prosecution and then to Dubai Courts.
Previously, bounced cheques, regardless of amount, may be subject to jail time. Now, a different approach has been implemented by the UAE government. Under Law No. (1) of 2017, fines will be imposed as follows:
But it's not a guarantee that issuers can walk away with just paying fines. Lawbreakers must still pay the cheque amount especially if recipients take civil action. Issuers of cheques of more than AED 200,000.00 end up with jail term sentence.
For bounced rental cheques, most landlords opt to put smaller fines. They are usually stipulated in tenancy contracts. Notifications are sent to tenants to settle payment and fine. Most of the time, landlords give enough time to tenants to settle the issue. Failure to comply, after given warning, results to landlords pursuing action in Rental Dispute Centre. It also gives leverage to landlords in evicting tenants right away.
A cheque (or check) is normally a piece of document used as payment. It orders an issuer's bank to pay a specified amount to the recipient. To recipients, it allows them to go to a bank and get the money. To issuers, it served as a promise to pay the bank that gives money. It is a secure way of paying because actual money is not involved. Cash loss or theft is minimized by undertaking this payment method.
UAE-issued cheques used must be drawn and provided by a bank to issuers. Banks provide account holders with cheque books containing printed and encrypted forms. A legitimate cheque should contain the following details:
As issuers, it's their responsibility to make sure that they are providing valid cheques. At date of issuance, issuers must have funds to cover the amount on issued cheques. Failure to do it results to bounced cheques and further legal actions follow.
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