Security Deposit Refund: Common Issues and How to Resolve them?

Tenants are liable to pay security deposits in Dubai at the start of the tenancy contract. Basically, it is a payment that ensures that a landlord will not incur any loss if any unforeseen circumstance occurs. Rera’s security deposit percentage is 5% of the annual rental income.

A landlord normally charges 5% of the annual rental contract in advance for unfurnished properties as a security deposit to manage the wear and tear in order to resume the original status of a particular property.

For furnished properties, the amount of security deposits usually starts from 10% of the annual rental income. The amount can be used to address damage or cover loss of rental payments. However, a landlord is bound to return security deposits to the tenant when the tenancy contract finishes.

If a tenant keeps the property in good shape and maintains it thoroughly, then he can expect to receive his full amount upon the end of the tenancy period and if there is damage or the property needs maintenance, then the landlord will use this payment and return the remaining payment to the tenant after the completion of their agreement.

What Is The Law For Security Deposit?

In Dubai, landlords have the right to receive rent on time and request security deposits. Article 20 of the Dubai Rental Law emphasizes that the landlord receives security deposits for the maintenance of the property. 

What Is a Security Deposit Refund:

The landlord cannot keep a security deposit for rent in Dubai. The law binds him to return the said payment to the tenant if he does not find any issue related to his property. He has to refund security deposits to tenants. However, if the property requires repair, then the landlord can use this amount to repair damage or defects. Primarily, the purpose of a security deposit is to ensure the protection of property during the tenancy period.

It is used to cover any potential defect that requires repair. Landlords should document any such costs in order to maintain transparency. He is also obliged to return security deposits to the tenant if there are no issues related to property damage or unpaid rent.

Security Deposit Refund: Common Issues

Several issues tend to occur, when it comes to paying bank security deposits.

Deductions For Damages

The landlord has the right to deduct from the security deposit to manage repairs beyond normal wear and tear. Basically, the main purpose of security deposits is to cover expenses related to repair and damages during the tenancy period. However, disputes may arise over the extent of damage. A tenant may also question the fairness of the deduction based on the scope of damage or repair.

Unnecessary Delay In Refunding

A landlord is obliged to refund a security deposit on time. However, sometimes tenants may experience an unnecessary delay or landlords may take longer than decided or expected time to repay this specific amount to tenants. This act of landlords can become a source of frustration for tenants. 

Unilateral Deduction

Though a landlord has the right to deduct from security deposits, he must document all included items to maintain transparency. However, issues may arise if a landlord deducts charges without proper documentation. Given that, it is imperative to document every expense to ensure transparent dealing and avoid the possibility of such issues.

Communication Issues

Both parties must understand the legal rights and obligations related to security deposits. Proper understanding and clear communication are imperative. A lack of proper community and unawareness of rights and obligations may lead to disturbance or problems.

Change In Management

Sometimes, a change in property management or ownership of a specific property may also lead to security deposit refund issues. This transition may cause confusion or conflict between both parties involved, often resulting in delays in processing refunds. Unclear communication may further aggravate the problem.

How To Resolve Issues Related To Security Deposit Refund?

First, both parties should try to address such an issue. They should communicate clearly to address disagreements and resolve the matter amicably. If they cannot find a middle ground, then one of them may file a legal complaint.

If you are worried about how To Get Security Deposits Back, then file a case against your landlord in RERA. RERA, a division of the Dubai Land Department (DLD), is responsible for resolving disputes between landlords and tenants. If there is any issue or conflict between both parties, either of them can proceed legally. RERA resolves the issues associated with tenants and landlords. 

How To Avoid Common Security Deposit Refund Issues?

Understanding Of The Law

It is mandatory to familiarize yourself with local laws related to deposit refunds. Understanding these laws will help you understand your rights and obligations. You will not only avoid legal pitfalls but also can pursue legal action if needed.

Clear Communication

Clear communication is very important. Everything must be clear between both parties. The terms and conditions regarding security refunding matters should be clearly stated. Landlords should also explain everything clearly to tenants before they sign the tenancy agreement.

Inspection

Move-in and move-out inspections also ensure a fair and transparent process. Tenants should conduct a thorough inspection of rented properties alongside the landlord or property manager. It may involve proper documentation of the property’s condition, noting existing damages, and ensuring all available facilities and amenities are in good condition. Also tenants should also consider a move-out inspection to find any damage or repair beyond normal wear and tear to maintain fair conduct.

Return Security Deposits On Time

Security deposits that are refundable must be returned on time. Landlords should return security deposits promptly in the given time. Furthermore, they should also provide a document containing all deductions regarding security deposit funds. A written document or statement normally justifies the use of security deposits. If a landlord returns security deposits late or fails to provide any such statement, he may lose his right to without even a part of security deposits.

Professional Services:

You may also seek the services of professional property management. Professionals can help streamline this process, make getting refunds from concerned persons easy, and resolve disputes professionally and effectively if necessary. 

Summing Up:

Tenants have to deposit a security fee to the landlord or property manager before moving to a rental property in Dubai. Landlords are liable to refund security deposits upon the completion of the tenancy contract. The security fee allows landlords to use it to address damage or repair caused by the tenant and avoid incurring that cost. Some people may experience issues regarding security deposit refunds mainly because of deductions, unclear communication, and changes in management.

RERA is authorized to resolve such issues in Dubai. Both parties should communicate clearly about terms and conditions and have thorough move-in and move-out inspections to avoid issues related to security deposit refunds in Abu Dhabi, Sharjah, Dubai, etc.

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