Host
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Drive Live Talks Legal. Our guest today is Ludmila Yamalova from Yamalova & Plewka. Ludmila, good to see you this week. How are you?
Ludmila Yamalova
Good to be here.
Host
We have lots of questions, and we’ll get to our topic later, which is about predatory lending. I had a go at explaining it, but I’m sure you’ll do a much better job. Let’s start with a question from a listener.
The listener says, “I registered a bounced check case with the police against an individual. I understand that his visa is expiring in December. Will he be able to renew the visa if a case is registered against him? Furthermore, can he sell a property if a case is registered against him?”
Ludmila Yamalova
With regards to renewing the visa, no, he will not be able to renew the visa. To renew a visa, you need the physical passport. In cases like this, where a bounced check case is reported, the usual practice is for the police to take custody of the individual’s passport until the matter is resolved.
It is rare for the police to release the passport temporarily to allow visa renewal unless there are extraordinary circumstances, which this case does not seem to meet. Therefore, practically, the visa will not be renewed. However, because the passport is with the authorities, any fines or penalties for overstaying can be waived once it is shown that the passport was retained by the police.
Host
What about selling a property? Can this person sell property if there’s a case registered against them?
Ludmila Yamalova
Yes, they can sell the property. To sell property, the Emirates ID alone is sufficient. The land department or transaction centers don’t check for criminal cases. The act of selling property is unrelated to a police case, so as long as the person appears with the correct ID, they can proceed with the transfer.
Perhaps the person asking is hoping the sale might provide funds to settle the owed amount, which would be a legitimate reason to allow the individual to continue with the sale.
Host
Thank you, Ludmila. Here’s another question: “A 60-inch flat-screen TV fell on my two-year-old daughter yesterday in a major supermarket. She ended up with a concussion. Thankfully, she’s okay, but it could have been much worse. I want to complain, but I’m unsure if they’ll take the safety issue seriously. What can I do?”
Ludmila Yamalova
Health and safety issues are taken very seriously here. There are two potential routes you can pursue: criminal and civil.
- Civil: This involves filing a court case against the supermarket for damages. However, compensation is only granted for actual damages, such as medical bills or other expenses incurred due to the incident. In this case, since the child thankfully only suffered a mild concussion, the medical expenses may not warrant filing a civil case. The UAE does not award punitive damages, which limits the financial incentive to pursue a civil case in situations like this.
- Criminal: To raise public awareness and ensure corrective action, the best course of action is to file a case with the police. The police can work with the retailer to improve practices or refer the matter to the prosecutor, who can impose penalties or rulings requiring the retailer to amend their safety practices.
Unfortunately, the UAE does not have the same culture of litigation or mechanisms for punitive damages as you might see in other jurisdictions, such as the US or parts of Europe.
Host
That makes sense. I suppose the main takeaway here is that the child is okay, but the incident highlights the need for better safety practices.
Ludmila Yamalova
Exactly. While litigation is limited in its scope here, filing a police complaint can still help to address the issue and prevent future incidents.
Host
Let’s move on to today’s main topic: predatory lending. This is an area you feel strongly about. Can you tell us more about what predatory lending entails?
Ludmila Yamalova
Predatory lending refers to unfair or exploitative banking practices, typically involving loans, mortgages, or credit lines offered under exorbitant and unreasonable conditions.
For example, some loans in the UAE charge interest rates of up to 50% per year. These loans are often targeted at less financially savvy individuals who may not fully understand the terms or seek proper counsel before signing.
The issue is twofold:
- The unfair terms of the loan.
- The vulnerable population being targeted by these practices.
In one case we dealt with, a person borrowed AED 33,000 over four years and was expected to repay AED 70,000—effectively a 50% annual interest rate. When their financial circumstances changed, they couldn’t meet the payments and felt trapped with no options.
Host
That’s shocking. Are there any regulations in place to prevent these practices?
Ludmila Yamalova
Unfortunately, the UAE currently lacks regulations to cap interest rates or prevent predatory lending. Banks can charge whatever rates they wish, as long as the borrower signs the agreement.
What makes the situation worse is that these loans are often secured by postdated checks, which banks use as leverage. If borrowers default, banks can use these checks to file criminal cases against them, leaving them with little recourse.
Host
It seems like borrowers are left with all the risk. What can people do to protect themselves?
Ludmila Yamalova
The best advice is:
- Read the contract carefully. Don’t rely solely on what the broker tells you.
- Understand the terms. Know the difference between fixed rates and reducing balance rates.
- Have a backup plan. If you take a loan, make sure you have some contingency in case you face financial difficulties.
Unfortunately, many people don’t take these precautions, often because they’re in desperate need of funds. It’s a tough cycle.
Host
It’s a challenging issue, especially with the lack of regulations. Thank you, Ludmila. We’ll be back after the break to answer more of your legal questions on topics like divorce, job loss, and financial difficulties. Stay tuned!
Host
Welcome back to Drive Live Talks Legal. Ludmila Yamalova from Yamalova & Plewka is here to answer your legal questions. Let’s dive right back in. Here’s a question we’ve received:
“I want to file for divorce in the UAE, but I wasn’t originally married here. I’m a resident, but my spouse is not. Is it possible to file for divorce here? Also, what’s the timeline and cost involved?”
Ludmila Yamalova
Yes, you can file for divorce in the UAE even if you were not married here. As a resident, you have the option to file for divorce in the UAE or in the country where your marriage was originally registered.
As for the laws that will apply:
- If both parties agree, you can choose to have the laws of the country where the marriage was registered apply.
- By default, Sharia law is applied in the UAE, but this only applies to Muslims. For non-Muslims, you can request the court to apply the laws of your home country, but you’ll need to educate the judge about those laws, which adds complexity.
Regarding the timeline and cost:
- The timeline varies depending on the complexity of the case and the availability of documentation. Missing or unverified documents can delay the process significantly.
- Costs depend on how contested the case is and whether additional legal challenges arise, such as disputes over assets or custody.
If both parties cooperate and the documentation is in order, the process can move relatively quickly.
Host
Thank you, Ludmila. Let’s move to another question. This one is about a guarantee issue:
“I gave my passport to the police as a guarantee for someone who told me they had a minor traffic case. It’s now been almost two years, and the case is much bigger than I was led to believe. The person has disappeared, and the police are holding my passport. I’ve been told there’s no deadline for resolution. What can I do?”
Ludmila Yamalova
Unfortunately, this is a very difficult and common situation. There are two main points to address:
- Liability: As the guarantor, you are not liable for the original cause of action (such as the traffic incident) because that responsibility lies with the individual involved. However, if there are any fines or penalties attached to the case, you, as the guarantor, may be held financially responsible.
- Timeline: There is no fixed timeline for such cases to be resolved. If a judgment is issued against the individual and they are unavailable to pay, the guarantor is often required to settle the financial obligations to close the case.
The best advice is to avoid acting as a guarantor unless you have complete trust in the individual. Unfortunately, in this case, your only option may be to wait until the case is resolved, which can take significant time.
Host
That’s a tough situation. Moving on to another case involving passports, this listener says:
“My maid was stopped at immigration while traveling for annual leave in July. Her passport was confiscated, and she was told it was due to a salary certificate someone had forged in her name. The police say she has to wait until the investigation is complete, but it’s been over three months. Is there anything we can do to expedite this?”
Ludmila Yamalova
Yes, the police have the right to retain the passport during an active investigation. The process can be slow, especially if evidence is still being gathered.
Here’s what you can do:
- Proactive Follow-Up: Visit the police station regularly to inquire about the status of the case.
- Provide Evidence: If your maid has any evidence proving her innocence, such as documentation or witnesses, submit it as soon as possible.
- Arabic Speaker: Ensure that someone fluent in Arabic accompanies you during interactions with the police to avoid miscommunication.
If the case has not been forwarded to the public prosecutor, it may indicate that the evidence is insufficient, and the police could choose to close the case. This would be the best outcome, as it avoids further legal proceedings.
Host
That’s helpful advice. Let’s wrap up with one final topic: predatory lending. Before the break, you mentioned that many borrowers don’t fully understand the loan terms. Are there any practical tips for people to avoid falling into this trap?
Ludmila Yamalova
Yes, here are a few key takeaways:
- Never Sign Without Reading: Always read the full contract, no matter how much pressure you’re under. If you don’t understand something, ask for clarification.
- Understand Key Terms: Be aware of the difference between a fixed interest rate and a reducing balance rate, as these can significantly affect how much you pay over time.
- Check for Hidden Clauses: Many loan agreements include clauses allowing the bank to change the interest rate without notice. Look out for these terms.
- Seek Advice: If possible, consult a legal or financial advisor before signing.
- Plan for Worst-Case Scenarios: Ensure you have a backup plan in case you face financial difficulties and can’t meet the repayment schedule.
At the end of the day, remember that there’s no such thing as easy or cheap money. If a loan offer sounds too good to be true, it probably is.
Host
Wise words. Ludmila, as always, thank you for sharing your insights.
Ludmila Yamalova
It’s my pleasure.