Dubai tenant ordered to pay Dh5,000 after landlord complained about signature on cheque

Mario Volpi advises a Palm Jumeirah tenant who has had no problems with cheques in five years, but is then told the contract has been breached because of a 'dodgy-looking' signature.

Mario Volpi advises a Palm Jumeirah tenant. Pawan Singh / The National

I have rented for five years from the same landlord who owns the entire building on the Palm that I reside in. I have paid with four post-dated cheques every year and the lease is recorded with Rera. I have never had any problems with my post-dated cheques. Recently a cheque was returned by the bank because the bank decided that my signature looked irregular. Sufficient funds were in the account to cover the cheque. The bank never bothered to call me. The landlord sent a letter that in the lease, clause 23 states "should any payment be returned from the bank, for whatever reason, then the penalty of Dh5,000 will be charged by the landlord to the tenant. Payment must be made in seven days of the due date or it will be treated as a breach of contract by the tenant and the landlord may supply immediate notice in writing to vacate the property". They stated if payment is not received in seven days they will report me to the authorities. A call first would have been nice. Can they legally charge Dh5,000 since the funds were in the account? FJ, Dubai

Your situation seems ridiculous to me; you would have thought after five trouble-free years the landlord would have called you to see what the situation was. That said, it is regrettable that you have a clause in your contract that you have signed and therefore agreed to that states if a cheque is returned for whatever reason then this charge will be levied. I advise initially trying to negotiate with the landlord and hope that he waives away this charge. If this fails, make an appointment with the branch manager of your bank to talk about the situation and politely explain that the bank’s actions have cost you this “fine” and inquire what the bank is prepared to do about it. If this also falls on deaf ears, unfortunately there is little you can do but to swallow this and put it down to experience. It is unfortunate but the landlord could argue that you were/are fully aware of the terms and conditions of your agreement.

I moved into a villa in The Springs in July 2013, and paid Dh100,000 in one cheque plus the Dh5,000 deposit and the required agency fee. At the beginning of April 2014, the agency and I agreed to a 7 per cent increase (Rera stated 10 per cent), so I paid Dh107,000 in one cheque. In November 2014, I found out the agency had skipped the country. In January 2015, the villa owner called me and said the agency had defrauded him of a cheque as he and the agency had agreed to three cheques and the last cheque did not clear. But they had agreed and signed between them Dh120,000. He informed me that he now wants Dh130,000 for rental. I showed him my tenancy agreement and the Ejari, and informed him that I agreed to renew the agreement based on the Rera calculations. Towards the end of March, I was contacted by the owner's new agent also informing me that the owner wants Dh130,000. There have been some emails back and forth, however for the past week I am not getting any responses. The current tenancy contract ends soon and I am not sure what to do next. Do I have the right to stay in the villa even though there is no new tenancy agreement? I contacted Rera and they said I should go to the Rental Dispute Centre in Deira and lodge a complaint. Would this incur further cost? CK, Dubai

The landlord cannot charge you Dh130,000 for this villa based on three points. Firstly, the increase he is asking amounts to just under 22 per cent based on your existing rental amount. The most a landlord can request in any one given year is an increase of no more than 20 per cent. Secondly, the increase can only be in line with the Rera rental calculator – in this case it can only be 5 per cent. Thirdly, any changes to the existing contract have to be communicated by either party in writing giving at least 90 days' notice of the same, but this is not a unilateral decision as both parties have to agree to the change. If your landlord is not responding to your communications, my advice is to prepare the rental cheques payable to the landlord as per last year's agreement and hand them to the rental dispute centre in Deira. They will contact the landlord on your behalf to say his rent cheques are with them for his collection. The law states that unless otherwise terminated by the tenant, a rental contract automatically renews, so there is no need to worry about the fact that we are getting close to the deadline.

If the owner still does not accept anything you are saying, then you have no alternative but to lodge a complaint against him at the rental dispute centre. This incurs a cost of 3.5 per cent of the yearly rental amount.

Mario Volpi is the managing director of Ocean View Real Estate and has worked in the industry in the emirate and in London for the past 30 years. Send any questions to [e-mail].

The advice provided in our columns does not constitute legal advice and is provided for information.

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