Pay a higher rent with four cheques, or less in one – and all upfront. This is a dreaded decision many tenants must make living in the UAE.
For decades, property renters in Dubai have had to commit to large sums of money – a year in advance – to be able to rent an apartment or villa. For many residents, this system has long been one of the market’s most persistent drawbacks.
Now, a new wave of proptech firms are attempting to dismantle that model.
One of them is Takeem, a UAE-based start-up offering what it calls a “rental guarantee” product and says it has the answer. It uses an insurance-backed system designed to replace upfront cheques with monthly digital payments.
Its core claim is that it can do so at a cost both tenants and landlords are willing to accept. This is something previous attempts in the region have struggled with.
How? Rakesh Mavath, Takeem's co-founder and chief executive, said the secret ingredient was comprehensive UAE property market data that did not exist before, which convinced insurers to lower costs to affordable levels.
“We managed to get it 60 per cent less than what the international companies who do it in other regions were quoting us,” he told The National.
The concept raises a central question: Could this model realistically solve one of Dubai’s most painful rental challenges, or is it yet another iteration of an idea that has struggled to scale in the past?
Removing the risk
In the UAE, the recent rise of FinTech platforms such as Ziina and PayBy allows tenants to pay rent digitally by bank transfers, cards or wallets, often using payment links or QR codes.
Alongside these, platforms such as Rently, along with similar “rent now, pay later” providers such as Keyper and ezy, remove cheques for tenants by paying landlords upfront and converting rent into instalments. They can do so by adding a financing layer, typically increasing costs by roughly 5 to 16 per cent, rather than eliminating the cheque system itself.
That is where Takeem says its model differs. It attempts to replace the cheque itself as a form of security through an insurance-backed guarantee.
The cost of this protection is around 4 per cent of annual rent, said Mr Mavath, though landlords can choose whether to absorb this cost or pass it on to tenants.
How it works
Dubai’s rental structure has historically prioritised landlord security over tenant convenience. Without a unified credit scoring system comparable to those in other global markets, landlords have relied on postdated cheques as a form of financial assurance.
This approach has proven effective in reducing risk, but it has also created significant barriers for tenants. Large upfront payments can strain liquidity, particularly in a city where many residents are expatriates with limited financial history in the country.
Mr Mavath describes the issue as structural.
“Now, in the whole element of that, we went to the landlord, and we asked them, what are your pain points?” he said, and which were: “What happens when a tenant defaults … those 2am phone calls … and the pre qualification of tenants.”
“We looked at a solution that would actually assist landlords … because we knew that they're the ones who dictate the terms of any rental contract,” he added.
The company’s proposition is to remove the need for large upfront payments while maintaining, or even enhancing, the level of security landlords expect.
If a tenant defaults, the insurer covers several months of rent, typically between four and six months, while tenants pay monthly through a digital direct debit system.
In theory, the model aligns incentives across the rental ecosystem. Landlords gain income security, tenants gain flexibility, and intermediaries such as agents can earn additional commissions through distribution.
“That's why we call it the perfect win-win-win situation,” said Mr Mavath.
The company spent about 18 months building the product, focusing initially on institutional clients before expanding to individuals.
“We actually already started back last year … we had a very clear strategy to build up a B2B distribution network first,” Mr Mavath said. The company has since onboarded tens of thousands of units, which rose from about 55,000 to 95,000 in a matter of weeks, representing more than Dh9 billion in annual rent, he added.
Its consumer-facing product launched in January, with the UAE as its initial focus, while expansion is not limited to the Gulf region, he said, with Takeem's regional selection expected to also be data-driven.
Challenges
While the concept may appear novel in Dubai, it is well established elsewhere. In markets such as the UK and Australia, rent guarantee insurance is widely used, particularly among professional landlords.
However, attempts to replicate these systems in the Gulf have historically encountered significant barriers.
One of the most important barriers is data. Insurers require reliable historical data to price risk accurately. In markets where such data is limited or fragmented, insurance premiums can become prohibitively expensive.
Takeem argues that this is where it has differentiated itself.
“We built the most comprehensive data set of defaults, delays … we took that back to those parties, and we said, OK, evaluate your risk now,” Mr Mavath says.
“It was a lot of legwork, a lot of grit, a lot of convincing,” he added.
Another challenge is behavioural. The cheque system is deeply embedded in the UAE’s property market, functioning not only as a payment method but also as a symbol of commitment and trust.
“In Dubai, the cheque is not just a payment method, it is a habit, a screening tool and a shortcut to enforcement,” said Mario Volpi, senior vice president of investment advisory at Allegiance Real Estate.
The economics must also hold. For landlords, the key question is whether paying around 4 per cent is justified, particularly when cheques have historically provided a simple and familiar form of security.
“At 4 per cent, it is compelling only for certain landlords,” Mr Volpi said, adding that it is most attractive for institutional owners, higher-turnover units and those prioritising predictable cash flow.
For tenants, the benefit lies in improved cash flow. Monthly payments align with salary cycles, reducing the need for large upfront sums.
However, the model depends heavily on scale. Like most insurance-based systems, it relies on pooling risk across a large number of users.
“Ultimately, it's a volume game,” Mr Mavath says.
Slow adoption
Adoption remains another hurdle.
“The value is there … but the urgency wasn’t felt,” said Pooja Vithlani, Takeem’s co-founder and chief product and technology officer. “People wanted it, but they were like, 'Do I really need it right now?'”
She added that education remains critical. “We’re going into an ecosystem which is so used to doing things a certain way … so there’s an education layer as well.”
There is also a risk of confusion in the market. “There are others … offering solutions that are similar … people may not understand the differences,” she said.
Mr Volpi added that adoption is likely to follow a phased pattern, with larger institutional landlords and professionally managed portfolios moving first, while smaller private landlords remain more resistant to change.
“The market is moving, but it is moving in layers,” he said.
If rental guarantee models gain traction, they could have far-reaching implications for Dubai’s property market. Monthly payments could improve affordability and increase tenant mobility.
Legacy systems
Yet the transition is unlikely to be immediate. The cheque system remains simple, familiar and effective from a landlord’s perspective.
“I think that for a while at least the hybrid model will exist,” Mr Volpi said.
The direction of travel may be clear, but the pace of change will depend on something less tangible than technology or pricing: trust.
“Yes, the model could scale, but not by trying to abolish cheques altogether,” Mr Volpi said. “It will scale by doing things that cheques no longer do especially well.”
