How to avoid property rental scams

PROPERTY brokers in Dubai have been scamming tenants out of rental cheques, according to reports, which have resonated with a surprisingly large number of people.

Disreputable estate agents have reportedly run away with tenants’ rental cheques, many of them for a full year’s rent, plus other fees, such as deposits, commission and DEWA bills. These amounts were never transferred to the intended landlords, so no tenancy relationship ever materialised. The real estate agents were nowhere to be found.

So what can you do to avoid falling victim to such scams? cashy spoke to Ludmila Yamalova, founder and managing partner of legal firm HPL Yamalova & Plewka JLT. Here’s what she had to say…

Can people avoid these scams?

These situations are unfortunate, but not unavoidable. In fact, there are certain steps that tenants can and should take to ensure they don’t fall prey to such scams in the future.

First, tenants should never issue rental cheques in the name of either a property agent or their company. Nor should they transfer cash to anyone other than its intended recipient. In the case of rental cheques, the intended recipient is the landlord. Therefore, cheques should only be issued in the name of the landlord, including guarantee deposits and DEWA bills. Only commission cheques should be issued in the name of the agent.

Avoid paying for rent in one cheque, too. Paying in multiple cheques, even monthly cheques, is becoming more acceptable. Such practice will further reduce the chances of rogue property agents, insofar as it will reduce the incentive to engage in fraudulent activities.

Can you tell if an agent’s legitimate?

Freelance real estate agents are no longer allowed. Prior to engaging the services of any real estate agent or agency, tenants should confirm that both the agent and the agency are registered with the Real Estate Regulatory Authority (RERA) and are properly licensed.

Under RERA regulations, all property agents and companies must be registered with it. To be registered, agents must meet certain academic qualifications, take a specialised course developed by the Dubai Real Estate Institute and pass an exam.

Agents must carry a RERA card – so ask for proof before formally engaging any agent.

Being RERA registered doesn’t guarantee that agents will not engage in scams, of course, but it does offer additional scrutiny and a system of accountability.

Also ask for a copy of the trade license of the property agency for whom the agent works.

And always try to establish direct contact with your prospective landlord to ensure that the agents are lawful representatives.

If you’re scammed, what can you do?

Should the agent abscond or act improperly, tenants might have recourse against the company. Under UAE law, all property brokerage companies must be 100% owned by a UAE national. Therefore, it’s unlikely that the company owner would abscond.

Pic credit: Michal Marcol/ FreeDigitalPhotos.net

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