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Abu Dhabi, UAEMonday 10 December 2018

Homefront: Dubai agent refuses to refund Dh6,000 booking fee despite tenant cancelling within 24 hours

The Dubai resident reserved two apartments in Dubai Silicon Oasis but changed her mind over job fears

The family wanted to move into Dubai Silicon Oasis after falling rents in the emirate opened up new options for their rental budget.  Satish Kumar / The National
The family wanted to move into Dubai Silicon Oasis after falling rents in the emirate opened up new options for their rental budget. Satish Kumar / The National

Falling rents in Dubai's real estate market is giving middle class families, such as mine, the opportunity to move to new locations in the city. Deciding to take advantage of such low rents, we booked two apartments in Dubai Silicon Oasis (one for us and one for my husband's parents). We paid Dh3,000 for each apartment as a security deposit/booking fee, which we were told was refundable. Unfortunately, the same day my husband had some indications that his job may not be secure, so we decided to cancel the booking. We were then told by the agent that our security deposit would not be refunded even though we have not signed a legal rental contract. This all happened within a 24-hour time period and we have not even set foot in these apartments. Because my husband is the only earner, and the sponsor of his parents and myself, we cannot afford to lose this deposit. How can we ensure the money is refunded? Can we lodge a complaint or take the agents to court? And do agents have any right to retain the deposit when we have not even signed a contract? NN, Dubai

When looking to rent a property, a booking fee or security deposit is given by the tenant to reserve the unit and remove it from the open market. This deposit is normally non-refundable, given the landlord is effectively blocking it for you alone, therefore denying anyone else from taking it.

The receipt for this payment should state whether this amount is refundable or not. If it doesn’t mention this and you only have a verbal confirmation that it is refundable, you may have a "he said, she said" scenario on your hands.

My advice would be to immediately seek a meeting with the landlord. You will be able to explain your situation in full, in the hope that a compromise can be reached between you.

Given that this all happened within 24 hours, you can argue that the landlord has not lost out on many or indeed any other potential tenants during this time, especially if it goes straight back onto the market.

The key to success lies in proper dialogue with the landlord. I’m sure that he/she is a perfectly reasonable person especially as no contract has been signed. You may find yourself having to compromise, but either way, try to meet personally.

If all else fails, you can of course look to file a case at the Rental Dispute Settlement Centre but this takes time and a fee of 3.5 per cent of the rental amount to do so. You may decide it is not economically viable, as you may lose the case. If the judge does find in your favour, however, the filing costs are also normally added to your gain.

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Read more from Mario Volpi:

Homefront: Should UAE property agents charge VAT on commission?

Homefront: 'My property agent is forcing me into a maintenance contract. Is that legal?'

Homefront: Is there a formal way for a landlord to withdraw an eviction notice?

Homefront: 'Can I get the deposit back if I don't move into my Dubai apartment?'

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Every year I have problems with my landlord for my tenancy renewal. This year he wants to clear the cheque before signing the contract. I told him it's a big risk for me to pay a year's rent in one cheque without having his signature. I added that in the entire time I have rented from him none of my cheques have bounced. He refuses to change his mind. I am considering leaving the cheque at the Real Estate Regulatory Authority (Rera) as I did last year but he asked me not to go to Rera anymore? SB, Dubai

Despite the fact that laws are in place to help regulate the relationship between tenants and landlords, there are always instances that cause stressful situations which lead to strained relationships where one party is holding the other to ransom. In your case, your landlord is not being fair and he is definitely not taking into consideration the good history you have shared as tenant and landlord by insisting on his point. If a compromise cannot be reached between you, then I suggest you pay the rent via Rera, even though he has asked you not to. Indeed, I would question why he has an issue with you doing so.

This cheque collection is a legitimate service that Rera offers when parties are having difficulty in mediating between themselves. The landlord gets his money but he has to confirm the deal by signing the renewal contract too.

Mario Volpi is the chief sales officer for Kensington Exclusive Properties and has worked in the property industry for more than 30 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@kensington.ae