As of late, stories have been surfacing about rental scams in Dubai – everything from agent’s as well as companies taking advantage of an unsuspecting tenant to make money on the side, fake Power of Attorney, forged title deeds and even double renting scams (by tenants).
Unfortunately, more than a handful of tenants have had the sheer bad luck of going through this as their so-called agents gained trust on the pretense of false promises and disappearing after receiving checks in their own name. Among the worst-hit victims are those who pay the entire year’s rent in advance along with the usual upfront security deposit, agent commissions and utility bills.
Amounts get transferred and tenants never hear back from the agent. There’s no actual signing of the agreement and the amount never actually gets transferred to the ‘alleged’ landlord. This is one such account of what a real estate company owner, Ashraf Allam of Alliance Real Estate, recently experienced with one of his clients.
“The landlord called me up as he wanted to rent out his villa in Victory Heights. I proceeded to make an ad and just after half an hour I got a call from a client asking about this villa as he was in the area. He asked for the address which I provided; however, he told me he had just seen it and that it’s rented out. I told him this wasn’t possible but he insisted this wasn’t the case as he met a lady there who had just moved in claiming to be the new tenant.
Somewhat flabbergasted, I ran this through the landlord and he said it was still available. I explained to him what I had just heard and it’s fair to say he was quite shocked. He said he would go check it out and I echoed what he said, as I wanted to see for myself what the confusion was about.
So I went to the villa shortly and found a lady outside crying with a new-born and her mother. I asked her if this villa was available for rent. She wept out a “no” and just couldn’t stop crying! Her mother said they had had a problem with their agent and that the landlord had just left after speaking to them.
I contacted the property owner again and he told me the lady had handed over a 185k AED check crossed in the agent’s name who showed her some forged papers and POA. The landlord was just as upset as the lady and asked for my advice so as to what to do next.
I told him the best recourse here is to contact the Police at his earliest and bring it to RERA’s attention. I checked in with him a little later and he said he was unable to move the lady from the villa and had filed a case at the Dubai Rental Dispute Settlement Centre.”
When fraud comes your way, it usually arrives as an unwelcome guest, without any prior notice. Here’s what you need to carefully consider before signing any agreements or making out checks (plus a few useful tips in general):
1. Checks ONLY Get Made Out in the Landlord’s Name
Without a doubt, the first precautionary measure you must take as a tenant is to never make out rental checks to an agent or real estate company.
Advance deposits and bills as well as rent checks need to be made out ONLY in the landlord’s name per the Title Deed or the Landlord’s Power of Attorney; you should be given a copy of the stamped POA document by Dubai Courts. You can give checks to the landlord’s designated real estate agent or real estate company.
However, as a general rule of thumb, commission checks are only made out to the real estate company and not the agent’s name. If cash is given, you should always receive a receipt from the real estate company.
Another way to secure yourself is to not pay the entire year’s rent in one check. Some landlords can make it mandatory to pay the advance rent in one lump sum, though that doesn’t have to be the only option on the table. Instead, choose to pay (whenever possible) quarterly checks or ideally, monthly checks. Even if you do find yourself in a scam, the fraudster won’t get away with much.
Also be aware that there is no such thing as a “freelance Dubai real estate agent”. All real estate agents along with their companies are required by law to be registered with RERA. So you need to check their company details, company’s ORN number and the agent’s broker registration number which gives them legitimacy to advertise and show you only property that’s available for rent. All real estate agents receive a RERA Broker Card which they should carry with them at all times and be able to produce it to you upon request.
Even though agent’s can be any nationality, their companies must have a UAE sponsor and unfortunately, many people don’t look this up. If an agent can’t produce his/her RERA Broker Card, you may be dealing with a fraudster. It’s always good practice to do an agent search so you can find a particular agent and read up about him/her, including client testimonials.
2. Get Your Ejari in Order
In Dubai, you are required to register rental contracts using Ejari which you can also use to tally/verify the landlord’s name that is on the Title Deed. To get registered, you’ll need:
- Copy of the latest DEWA bill
- Scanned copy of the landlord’s passport
- Rental lease; original and photocopied document
- Your own passport and VISA copies
- Copy of the title deed
Ejari registration certifies that you are the legitimate tenant of the property in question. In addition, it’s needed when you need to register your VISA or bills. It also legally protects you in case a dispute arises with the landlord.
3. Run a Check on Property Ownership
It is up to you to ensure that the landlord is indeed the rightful owner and that the property isn’t mortgaged. In this case, the landlord should be able to produce the original title deed. At this stage, if you have any doubts whatsoever with regard to the ownership, you can ask the landlord to accompany you to the Land Department to verify that he/she is indeed the owner and the property isn’t mortgaged. If the property happens to be mortgaged, the bank’s consent is needed before it can be leased to you.
4. Unpaid Service Charges
Are there any unpaid service charges when it’s time for you to occupy the premises? The landlord should have no problem producing a statement from the developer or owners association confirming all dues as ‘cleared’. While this may not be directly related to scamming, it’s important nevertheless so you can enjoy access to all ancillary services of the association such as the swimming pool or gym.
5. Make Your Move Early
Is the property in good living condition at the moment? The period between the tenant inspecting the space and the lease being signed, ideally, needs to be as short as possible. This cuts down the risk of any unnecessary wear and tear and/or damage during the interim period.
6. Penalty Clauses Must be Clarified Beforehand
The terms of the lease need to be clear.
There are laws in place for the time frame or notice period a landlord must give to terminate a contract and it’s only for specific reasons. However, some important penalty clauses which should be part of a tenancy agreement are whether minor items will be fixed by the tenant and any repair over AED 500 will be taken by the landlord. Or, if there is an early termination of the lease by the tenant, then he/she pays the landlord a 2-month penalty.
7. Joint Inspection Prior to Vacating
When it comes to getting your security deposit back, you need to inspect the property along with the landlord to in order to agree on how much of the amount is due. In situations where the landlord is unable to attend the inspection, you can take photos as evidence, based on which, the landlord can have a good idea on the before/after condition of this property. You will get your deposit back accordingly.
Prior to signing any contracts, consult our registered agent network so that there are no doubts at all left hanging in the air. Living peacefully in your rented home is what you want and we are here to facilitate you through the entire process.