Dubai’s Real Estate Regulatory Agency (Rera) has received complaints against ‘some’ companies who are involved in sub-letting properties despite their trade license not allowing them to conduct such an activity.
The agency has also advised victims of the sub-letting scams to contact the Dubai Police and the rental dispute settlement committee while they along with the Dubai Economic Department (DED) are continuing their awareness and inspection campaign.
Meanwhile, Afridi & Angell, a Dubai-based law form, also advices that tenants should, at least, try to see the original title deed; try signing the lease agreement in presence of the landlord and if that isn’t possible check the authorized person does have a valid power of attorney, legalised by the Dubai Notary Public. Besides, renters should seek a document from the developer or the owners association confirming all service charges have been paid up to date by the landlord so they are not barred from using any facilities in the building.
Rera says, as per the complaints received from investors against some of the companies that violate the activities they were licensed to conduct by the DED, the complaints have been categorized into three types: the first is renting through companies that are not licensed to conduct real estate activities; the second type is illegally renting a unit without having an approval to do so and finally renting from real estate companies using ‘counterfeit’ cheques.
Rera is requesting people to verify the following information before renting an apartment:
* Check the trade licence of the real estate company
* Check its approved activities according to its license from DED
* Check registration number and the brokers’ license from Rera.
* All the above information can be found on DLD’s website: www.dubailand.gov.ae
As reported earlier a company has to furnish a guarantee of Dh5 million to DED if they wish to offer property leasing and management service.
In case of any disputes (read: fraud), the rent committee can liquidate this guarantee to settle claims.
Renters should also ensure that they issue cheques only in the name of real estate management companies and get the contract registered on the Ejari so to receive a certificate assuring its official registration.
Dubai-based law firm spells out measures to help tenants
By now, renters in Dubai know one thing: the onus is on them to check if they are dealing with registered brokers and licensed companies.
Not that many still may fall prey to these “fraud” companies, who offer huge discounts if one pays in a single cheque, renters, now, need to be more careful and smarter.
Afridi & Angell, a Dubai-based law form, advices tenants should, at least, try to see the original title deed; try signing the lease agreement in presence of the landlord and if that isn’t possible check the authorized person does have a valid power of attorney, legalised by the Dubai Notary Public. Besides, renters should seek a document from the developer or the owners association confirming all service charges have been paid up to date by the landlord so they are not barred from using any facilities in the building.
A renter should take the following steps in order to reduce the risk of being defrauded:
1. The lease should be registered with the Dubai Land Department in the Ejari system. Any lease that is not registered is not considered valid under applicable law. The obligation to register is on the landlord, but if the landlord is refusing to comply, the tenant may approach the Land Department to request registration.
2. The landlord should be the registered owner of the property. Ownership of property is evidenced by a title deed issued by the Land Department. The tenant should request to see the original title deed in the landlord's name. If the person claiming to be the landlord can only provide a copy, this raises concerns that he may not actually own the property. This is because when a property is sold, the seller should return his title deed to the Land Department, and the Land Department would issue a new title deed in the name of the buyer. The tenant could also request the landlord to accompany him to the Land Department for confirmation that the landlord is the owner.
3. Wherever possible try and sign the lease in the presence of the registered owner of the property (i.e. the landlord) and not simply in the presence of the landlord’s agent or marketing company. View the original identification papers of the landlord and obtain copies of the same.
4. If this is not possible, make sure that the person signing the lease on behalf of the landlord has the necessary authority to bind the landlord. The person claiming to have authority to sign the lease on behalf of the landlord should have a valid power of attorney, legalised by the Dubai Notary Public. To be safer, it is best if the power of attorney is less than one year old. The tenant should see the original document, and retain a copy.
5. The tenant should carefully inspect the property before signing the lease. If there are defects or damage at the property, these should be documented in the lease, with a clear statement that the tenant is not responsible for their repair.
6. The tenant should get sight of an original document from the developer or the owners association confirming that all service charges have been paid up to date.
7. If you are still unsure have these documents reviewed by a lawyer in order to check their authenticity.
8. If the landlord is using an agent, request to see the agent's Rera registration card. The agent's details should also be listed on the register of agents on the Rera website. If in doubt, contact Rera to check if the agent is registered.
A number of companies in Dubai are involved in fleecing landlords and tenants of their money and in most cases the companies never had a license to sub-lease the properties.
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