Avoiding scams in Dubai’s property market


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Property scams are on the rise in Dubai, especially as the sector gains momentum again and people are flocking to the emirate from across the Middle East. A growing number of people are falling prey to real estate fraud, resulting in losses of large amounts of cash and in some cases eviction. Now, more than ever, renters need to exercise caution and follow a number of steps to avoid being conned. Here are the main precautionary measures that need to be taken.

First and foremost, verify the number of the trade license the property company holds. It is also best to deal with a reputable agent than a company you’ve never heard of before. Upon obtaining and verifying the existence of a trade license number, confirm which of the company’s operational activities have been permitted by Dubai’s Department of Economic Development (DED). This should be included in its license.

Now, it’s time to look into the Real Estate Regulatory Agency’s (RERA) records. Have they given the company or property agent a broker’s license? This can be checked through RERA’s website or by calling +971600522212.

When all of the above is verified and you are ready to make your payments, be sure the cheques would only bear the name of the landlord as the beneficiary. If the property is overseen by a management company, make sure they have a notarized power of attorney that allows them to collect cheques on behalf of the owner. At this point, you should be able to see, as a minimum, the authentic title deed and have a copy of the property owner’s passport or identification card.

In case of subletting (renting the property from someone who is already renting it from an owner), the first renter will need to produce a letter or documentation from the landlord stating that he or she does not object to this activity. It is always advisable to sign the rent contract while the landlord is present.

In the event a third party is tasked with signing the lease, it should show a notarized power of attorney from the owner stating that it is given the capacity to do so. If this is not available, the third party needs to at least have a legally-binding power of attorney from the Dubai Notary Public.

All tenancy contracts are then listed in the Ejari system, a new platform that registers all such agreements with RERA. Once this is done, you should be given a certificate number from Ejari. If you miss this step, your contract is considered void.

Lastly, an important point to check is payment of servicing fees. Renters must ask for a document from the developer or the Owners Association stating that all service fees were paid by the owner prior to moving into the property. This will ensure you have access to the different conveniences and amenities in the building.

As a rule of thumb, never take someone’s word for a contract and always ask for a written document that is legally binding.

(Photo Credit: Moha’ Al-Bastaki)

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This post was written by Rachel Stinson

Rachel Stinson
Rachel Stinson+ an avid reader and writer (with a special interest in real estate and the property market), Rachel Stinson aims to provide value to anyone who reads her blogs

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  • Doubting tenant

    Interesting article Rachel, thank you.

    Question: you state the tenancy contract is void if not registered with Ejari. However our landlord states that he will only register after receipt of the cheques, as he claims the contract is irrevocably valid then so he risks non-payment.

    On the other hand, the landlord took 5 months to register last time (the first year) which gave us problems with visa etc., so we ended up registering ourselves but grrr. Also, he has a delay with paying community fees.

    Please guide us…

    • rachelstinson

      Thanks for reading!
      If you look at the Ejari website http://www.ejari.ae/PublicPages/faq.aspx , question 6 clearly states that all properties and contracts need to be approved by RERA first. I would advise you get in touch with Ejari or RERA and they will guide you in the right direction.

      • Doubting tenant

        Thank you Rachel,
        As you are responding to my queries, you seem to be implying that first the tenancy contract is registered and only afterwards the cheques are handed over. That is obviously good news because so often the landlord will not do anything after receipt of cheques and the tenant is stuck as he needs it for visa etc.
        However, when looking at the RERA website I did not spot that explicitly…

  • Aqsa

    Like all other industries, real estate industry is not safe from scams.
    There are groups of people working to harm real estate professionals. Make sure that whenever you are buying or renting a property from landlord or you are
    going to sell and rent your property to tenants, ensure this to make
    your contract in written form. Never assume that party you are dealing
    with will follow verbal promises.

 

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