ABU DHABI // When Shah thought his rent cheque might bounce, he did everything that he believed he was supposed to do.
Six months ago, the 30-year-old Indian had paid for his flat in Khalifa City with two cheques - one with the then current date, and one post-dated for September - but the property manager has since run into legal trouble and disappeared, taking Shah's cheque with him. This has left the villa owner, who has 10 flats in the building, high and dry.
It has also left Shah with a major headache. The absconding manager could still cash the cheque. "I am mostly just hoping he does not try to cash the cheque," Shah said. "I do not have the amount in my account, so it would bounce."
Shah tried to stop payment on the cheque at the bank but was told he needed to file an official complaint. After trips to three police stations, one court house and the Rent Disputes Committee, his case was denied.
"Obviously, I am worried," Shah said. "I know bouncing a cheque is a crime, but this was not my doing, and I tried to do the right thing."
Legal experts said this week that complications from writing postdated cheques have remained steady amid the economic crisis. The most widely accepted form of security, post-dated or even blank cheques are used across the region for transactions ranging from credit card applications to property investments.
"Writing post-dated cheques is still common, whether it is to banks for loans, a renter to a landlord or as a security, and this practice has not stopped," said Alexis Waller, a partner with the law firm Clyde and Co in Dubai.
"So long as people find them comforting, people are going to rely on post-dated cheques."
The punishment for bouncing a cheque is between three and seven years in prison, said Mazen Hegazy, an Abu Dhabi-based legal adviser. In some cases, a civil and criminal case can be filed, but the criminal case must be filed within six months of the infraction.
"There are more cases than you can imagine from 2008 until the present date," Mr Hegazy said. "There has been a huge amount of bounced cheques."
However, filing a case against someone who has bounced a cheque does not guarantee that the money will ever be paid.
"What many people may not understand is that reporting a bounced cheque to the police is not a guarantee that you will get your money back," Ms Waller said.
"It is just a comfort, as most people consider the criminal risk will make people honour the cheque."
Residents and experts said there are few consumer protections in these kinds of cases.
Mohammed wrote two cheques for his rent this year, one to be paid in January and the other with a September date. The bank mistakenly cashed the post-dated cheque more than six months early. Now, his landlord has a second cheque that could be cashed at any time.
"I am in a bad situation," said Mohammed, a 36-year-old Egyptian. "I wanted him to do a few repairs to the apartment that he was not going to do. Now, he knows I won't push him for them, because he has my cheque."
Mr Hegazy urged caution when entering into an agreement with someone new. "It goes back to personal relationships," he said. "You must do your homework and know the other person's financial situation, if he is good for it or not."
Central Bank regulations prohibit banks from taking blank security cheques "for granting loans or overdraft facilities or for issuing credit cards", but several banks still require one.
A credit check system, where a potential customer's solvency is screened, would cut down on the practice, Ms Waller said.
"Where can people go when they find themselves in strange circumstances?" Mohammed asked. "I can get a lawyer, but there should be somewhere to turn before it gets to a legal phase."