What Happens If My Tenant Doesn’t Pay Rent? (Dubai 2024)

As a landlord, you have a lot of responsibilities to take care of, and one of them is to make sure that your tenant is paying the property rent on time. Even though you have used a tough screening process before handing over your property to a tenant, there are some situations when a tenant fails to pay the rent due to financial difficulties. This is the time when a landlord has to deal with the situation sensibly and within the legal framework. This quick thinking will not only protect your interest but will also keep professional relationships with the tenant. In this blog, you explore what steps you can take if your tenant doesn’t pay the rent by keeping the rules and regulations in mind set by RERA (Real Estate Regulatory Agency).

RERA (Real Estate Regulatory Agency)

RERA (Real Estate Regulatory Agency is a government body that works under DLD, regulates the rules of the real estate market in Dubai, and ensures fairness, transparency, and efficiency in the industry. The responsibilities of the RERA include setting rules for property transactions, resolving property-related disputes, and protecting the rights of buyers and sellers. The primary purpose of the RERA is to restore confidence and trust in the real estate market.

What to Do If Tenant Fails to Pay the Rent?

As a landlord, it can be frustrating when a tenant fails to pay their rent. Whilst non-payment of rent doesn’t happen too often, when it does, it can lead to legal disputes and financial losses. 

If you’re in a situation where your tenant has failed to pay their rent, you might be wondering what to do about it, what options you have to recover the unpaid rent and whether you can evict them. 

Observe Rent Payment History

If the landlord keeps records of the tenant’s rental payments, this will be helpful when dealing with the non-payment issue. This record will serve as evidence in case of any dispute or legal process. When maintaining the record, make sure to include important details such as payment date, received amount, and payment method. You can also use digital platforms or property management software to streamline the process.

Remind Your Tenant About Pending Rent

When you are facing rental payment issues, communication can play a vital role. If your tenants fail to pay the rent, you should reach out to them and remind them about the outstanding payments . Even though you have to maintain professionalism, approach your tenant with the intent to communicate and enough time to respond. Communicating with the tenant will help you understand underlying issues, such as any temporary financial issues, and give you potential solutions.

Issue a Non-Payment Rental Notice to Your Tenant

If the verbal communication is not showing any positive results, then you should formally issue a non-payment notice to your tenant about late or missed payments, such as crafting a formal letter that outlines the missed payments, the outstanding amount, and any late fees or penalties. The letter must have clear consequences for continuous missed or late payments and a reasonable timeframe for solving the issue i.e., 30 days. 

Document a Letter to the Guarantor

In some cases, a third party or guarantor is responsible for covering the unpaid rent. If the tenant fails to pay the rent, you must contact the guarantor as agreed in the contract. You must send a formal letter to the guarantor stating the details of the arrears and requesting immediate payment. Contacting the guarantor will ensure that all the involved parties understand the situation and their responsibilities.

Issue Eviction Notice

After the 30 days notice to the tenant who fails to pay the rent, you can issue eviction notice to vacate the property. The process starts with the landlord issuing the notice to the tenant to vacate the property with stating the reason for eviction and the intended date of eviction. It would be best to consult with an attorney before sending the eviction notice who specialises in real estate and tenancy laws to ensure compliance with the legal process.

Arrears of Rent and Legal Action

If the tenant does not pay the rent and refuses to vacate the property, the landlord can ask the court to take action to recover the outstanding rental payment and implement the eviction. This process involves multiple steps, such as serving the legal notice to the tenant and then filing the case with the Rental Disputes Centre (RDC). The court will assess the evidence and make the decision.

Rental Dispute Centre

The RDC is responsible for resolving disputes between landlords and tenants, and it is the first port of call for any disputes related to rental properties in Dubai. Once the landlord files a case, the RDC will issue a notice to the tenant, informing them of the case and setting a date for the hearing. At the hearing, both the landlord and tenant will be given an opportunity to present their case, and the RDC will make a judgement based on the evidence presented. All the documents have to be translated into Arabic and submitted along with a memorandum, outlining the terms of a contract and any other details. 

If the RDC rules in favour of the landlord, the tenant will be ordered to pay the outstanding rent, along with any legal fees incurred by the landlord. If the tenant still does not pay within the specified time period, the landlord can request that the RDC issue an eviction order. The eviction order will give the tenant a specified period to vacate the property, and if the tenant fails to vacate, the landlord can request the RDC to evict the tenant. The RDC will then appoint personnel to execute the eviction. 

Preventing Tenant Issues

Whilst there is always some risk of encountering issues with your tenant, there are steps you can take to minimise this risk. The first is to ensure that you have a well-drafted tenancy agreement in place, which clearly outlines the terms and conditions of the tenancy and the consequences of non-payment of rent. You should also conduct thorough tenant screenings and maintain a good relationship with your tenants to avoid any disputes.

Creating a well-drafted tenancy agreement, screening tenants, maintaining a good relationship and acting promptly are all things that an experienced property manager can do on your behalf. 

Conclusion

It is very challenging for the landlord to deal with a tenant who is not paying the rent. To avoid this situation, you can take proactive and preventive steps and maintain a healthy and professional relationship between landlord and tenant. As a landlord, you have to familiarise yourself with relevant laws and regulations and consult with legal experts to deal with the situation promptly.

Here at Betterhomes, we manage the UAE’s largest portfolio of residential and commercial properties, with over 8,500 units under management. Contact us today to find out more about Betterhomes Property Management.