One of the easiest ways for a renter to pay rent is to give cheque to the landlord rather than carrying the cash. This is because unlike carrying cash for rental payment cheques are one of the secure sources. However, in some cases, they may bounce leading to some difficulties from a legal perspective.
Bounced Rental Cheque-How to deal in the United Arab Emirates
There are serious consequences and penalties for financial crimes in the UAE. The culprit may sentence to jail for 3 months-15years depending upon the severity and nature of the financial crime. Bounced Cheque in any form whether it be for rent or for any other purpose can send the person into prison. However, it is not entirely true in every case as it depends upon the circumstances & reasons due to which the cheque issued by renter bounced.
Most common reasons for bounced cheque maybe all or one of the following:
● Insufficient funds in the account of the issuer
● The cheque has been canceled by the issuer before payment was issued
● The tenant might have closed the bank account upon the issuance of the cheque
● There might be money in the bank, but there might be the possibility that pending transactions took the balance and remaining balance is below the amount mentioned on the cheque
Other Non-Illegal Issues for Bounced Cheque in the United Arab Emirates
Misspelling: The name written on the cheque is misspelled.
Signature: There might be any irregularities in Signature.
Overwriting: The overwriting on the cheque can also be one of the reasons for a bounced cheque.
What happens after Bounced Cheque in UAE?
According to the laws of UAE a person who had issued the check of worth less than Dh200, 000 could dissolve his case after paying the fine without having gone to the police station in some cases. But in some cases, according to law people with bounced cheques worth less than Dh200, 000 might be punished by the prosecution without the case being referred to court. The travel ban can also be issued in case of a bounced cheque in UAE.
The act of bounced cheque is one of the serious financial and criminal offenses in UAE. If in case the cheque bounces in UAE, the victim can route two routes:
(I) File a criminal case
(II) File a case in civil court
Criminal Case for Bounced Cheque in UAE
The bank will issue the letter stating with clear reasons that the cheque of tenant has bounced before preceding & raising of the criminal case. According to the laws of UAE, the landlord has the right to file the criminal case against the issuer if the reason(s) mentioned in the letter are of non-illegal issues. This procedure involves multiple steps and different bodies. The landlord will take the letter to the police station and also the bounced rental cheque issued to file the case against the issuer. The person who issued the cheque will summon to appear in the police station. The law gives the right & privilege to cheque issuer to clear the debt and any outstanding amount at the spot to clear all the liabilities. If in case the cheque issuer doesn’t have any money at that moment; depending upon the amount of how big or small is; the police station may allow and give the cheque issuer a certain period of time to arrange and clear the debt he owns. In another case, the cheque issuer might be detained if the person does not have money and also police won’t allow giving any time. After that, the public prosecutor will take the case further who may agree to release the issuer of the cheque as investigation proceeds. After the investigation is completed by the public prosecutor the case will be taken to criminal court where final judgment will be made. Depending upon the value of cheque the judgment made by the court can be prison sentence from a period of one to month to a maximum of three years. However, the imprisonment time period only comes into effect when the value of the cheque is worth more than Dh200, 000.
The following can be consequences depending upon the value of cheque:
● 0 to Dh49,000 – fine of Dh2,000 and no prison time
● Dh50,000 to Dh99,000 – fine of Dh5,000 and no prison time
● Dh100,000 to Dh200,000 – fine of Dh10,000 and no prison time
● More than 200,000 – potential prison time
As soon as imprisonment or fine is issued, the decision of the court will be final whether to pay to bounced cheque value to the claimant.
Civil Case for Bounced Cheque in the United Arab Emirates
The civil courts of UAE are somehow lenient for cheque issuer. They will issue the settlement plan for a specific period for a cheque issuer to arrange and clear the debts he is supposed to pay. The court may freeze and sell the assets of cheque issuers to clear the value of debt.