With bitcoin you will need to pay the annual rent in one go
GIVEN THE FLUID NATURE OF THE DIGITAL CURRENCY’S VALUE, IT IS THE ONLY OPTION
Want to pay off the annual rent using bitcoins? Then make sure you have enough to pay off the whole of it at the start of the contract period.
“Otherwise we would not be able to accurately estimate the amount of bitcoins needed at the outset of the contract — that is due to the fluid nature of the bitcoin currency,” said Firas Al Msaddi, CEO of fam Properties. “It would be unfair to the landlord if the bitcoin value goes down … and likewise, to the tenant if it goes up.”
The brokerage firm made quite a stir on the opening day of Cityscape when it announced that some of its clients were quite taken up with the possibility of settling their rental obligations by passing out bitcoins, which operates as a digital currency and is not bound by any sovereign attachments. These were apartment owners for a “limited number of apartments at City Walk”.
Fam Properties is all set to hit the “Go” button once there are clear regulatory guidelines.
The regulatory environment for digital currency is still in the infancy stage, and much will depend on this to take bitcoins into real estate transactions.
“It is true that at any given moment the value of bitcoin can vary considerably,” said Al Msaddi. “When entering into an agreement of bitcoin payment, the landlord and tenant must be aware of the possibility that one of them may lose if there is a significant change in the value of the currency during the day of payment.
“However, the established mechanism is very instant — we do not expect any considerable ups and downs of the bitcoin value during the lead-time of closing a leasing contract.”
Sheer novelty
But getting UAE consumers — so used to cash and plastic — to change their ways will take some doing. Of course, there will always be early adopters swayed by the sheer novelty of it all.
There are many exchange houses where bitcoins can be converted to cash, and one is currently available in Dubai.
“We are not trying to make transactions difficult,” said Al Msaddi. “We are simply offering extra alternatives to cash payments. There is absolutely no obligation to use our bitcoin payment scheme.