Real Estate Rental SCAM, how to avoid...

Whether you are an investor or tenant, falling into a real estate scam is an unfortunate event that we can avoid. It’s reported that a real-estate company rented many properties at a high price from landlords with multiple or four cheques then subleased them at a lower price with one upfront payment. Then the company closed and the CEO ran away while landlords and tenants wondered how to secure their rights.

In this case, tenants are in the weakest position because they do not have Ejari so inevitably they have to vacate the properties. Practically, it is the tenant’s responsibility to issue cheques under the name of the landlord. At the same time, landlords have to incur a loss of at least a one-month rental (to serve the notice period) along with the legal fees — not to mention the stress and wasted time.

If you are a landlord, you need to follow these steps upon getting a bounced rental cheque:

1. Visit the RDC (Rental Dispute Center) in the Dubai Land Department.
2. Issue a notice attested by Dubai Courts to the tenant to replace the bounced cheque which costs 3,500-5,000 AED.
3. After 30 days from sending the notice by Aramex, the case will be escalated to the judge who will issue an eviction notice that costs around 3.8% of the rental value.
4. In case the main tenant has not registered DEWA or Empower, landlords can explore or consider terminating the connection.

How to avoid real estate scams as a tenant?

• Always request the title deed of the property.
• Validate the property's title deed and owner's name on the Dubai Land Department website or REST mobile application.

• Issue cheques only under the name of the verified owner.
• Usually, you should not sign a yearly rental contract with a holiday homes company.

How to avoid real estate scams as a landlord?

1. Rent your property for one or two cheques only.
2. When dealing with holiday homes companies, sign a management contract instead of a yearly rental contract/Ejari.
3. Deal with large and known companies with multiple business verticals. fäm Properties offers a wide range of services such as new developments, rental, sales, development advisory, property management, mortgage, real estate development management, interior design, holiday homes, commercial real estate, valuation, outdoor media, and advanced tech tools.

Remember, you cannot add custom terms and conditions that override any law e.g., immediate eviction in case of bounced cheque.

Dubai Land Department did a great job by dedicating a full department for the rental issues a.k.a RDC (Renal Dispute Center) that has set clear rules such as “Subleasing requires a written consent of the owner”,  and as a part of the continuous improvement, the law could be amended to remove the unnecessary 30-day notice period in case the tenant is not reachable, or it is proven that the tenant runs away. 

Since one of our team members was a victim of this incident, we were able to gather over 35 properties rented by the company worth over AED 15.6M:

1. BAY CENTRAL AED 70,000
2. THE PAD AED 80,000
3. BLVD CENTRAL AED 82,000
4. BURJ VIEWS TOWER AED 85,000
5. THE RESIDENCES II AED  95,000
6. DOWNTOWN RESIDENCES AED  95,000
7. DOWNTOWN RESIDENCES AED 100,000
8. MARINA TERRACE AED 105,000
9. BLVD CRESCENT AED 110,000
10. BOULEVARD POINT AED 110,000
11. LIV RESIDENCE AED 115,000
12. BLVD CRESCENT AED 120,000
13. 29 BLVD AED 130,000
14. DOWNTOWN RESIDENCE AED 134,000
15. DOWNTOWN RESIDENCES AED 140,000
16. MARQUISE SQUARE TOWER AED 144,000
17. VIDA RESIDENCES THE HILLS AED 150,000
18. DAMAC TOWERS BY PARAMOUNT AED 150,000
19. ELITE BUSINESS BAY RESIDENCE AED 186,000
20. SILVERENE TOWERS AED  205,000
21. PALOMA AED 220,000
22. LOFTS T EAST AED 223,000
23. AURORA AED 235,000
24. STANDPOINT AED  273,000
25. BURJ VISTA AED 325,000
26. MARINA GATE 1 AED 370,000
27. BURJ VISTA AED 400,000
28. E123 AED 420,000
29. SPARKLE TOWER AED 430,000
30. CAYAN TOWER AED 573,500
31. MARINA GATE 2 AED 990,000
32. DAMAC HEIGHTS AED 1,228,000
33. DOWNTOWN VIEWS AED 1,435,000
34. BLVD HEIGHTS AED 1,890,000
35. BLVD HEIGHTS AED 1,937,000
36. JUMEIRAH LIVING MARINA GATE AED 2,232,000