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Abu Dhabi, UAEFriday 14 December 2018

Homefront: Dubai agent refuses booking fee refund despite no contract 

The tenant, who changed her mind about moving in, fears she will lose the money

The tenant has made a complaint to Dubai's Real Estate Regulatory Authority. Satish Kumar / Reuters
The tenant has made a complaint to Dubai's Real Estate Regulatory Authority. Satish Kumar / Reuters

I am Italian and have just moved to Dubai. I recently submitted a complaint against a real estate agent that does not want to return a deposit I paid to book a flat. I have sent the complaint to the Real Estate Regulatory Agency. Before signing the contract, I decided not to proceed as I heard about some suspicious overcharging on billing by the building's management. So, there is no contract signed and no mention on the receipt that the deposit is non-refundable. I think I am entitled to get my money back but the Rera officer has told me that I might lose the deposit. What do you think? Will I get the deposit returned? AL, Dubai

The rental security deposit is used to block or hold a property in your favour so that nobody can take it from you while the paperwork, or other procedures, take place. Under normal circumstances, this deposit is not refundable should you change your mind and not proceed with the deal.

The reasoning behind this is that the landlord may have lost out on renting it to someone else while it was blocked in your favour. Having said this, the receipt documentation should mention clearly that the deposit is not refundable. If as you say, your receipt doesn’t mention this at all, I’m of the opinion you should have your deposit back, especially as no contract was signed.

The reason the officer at Rera may have said you might lose the deposit is down to common practice here in the UAE, but let’s not jump to conclusions and wait for official confirmation from them.

While this many not help you at this point, I advise anyone putting down a deposit before signing a contract to check what happens if you change your mind and does not go ahead with the deal.

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Can a security deposit be utilised by a landlord to return the property, including its fixtures and fittings, to the state it was let out to the tenant? This is for a contracts that was signed 12 months ago. JS, Dubai

Arented property has to be returned to the landlord at the end of the tenancy period in the same condition it was given when the tenant first took possession. This is normally the responsibility of the outgoing tenant, however it is perfectly acceptable for the landlord to go ahead and repaint, clean and/or repair any fixtures and fittings as required using the tenant's deposit in order to return the property as it was given.

Problems with deposits are the source of many of the queries I receive, so it is important to ascertain at the start of the contract exactly how the deposit money can or will be used by the landlord in the event of any type of expenditure.

I am aware that Rera is working towards a model similar to the UK where the deposit is held in escrow and can only be used by approval and under certain strict guidelines. This is not in place at the moment but I’m certain that Rera will implement a better workable model for tenants' deposits at some stage in the future.

Mario Volpi is the sales and leasing manager at Engel & Volkers. He has worked in the property sector for 34 years in London and Dubai.

The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to mario.volpi@engelvoelkers.com