Dubai: A series of recent property scandals, where separate brokerage companies apparently vanished with rent monies due to Dubai homeowners in close succession, may be linked and are feared to be much bigger than previously thought.
Gulf News has learnt two of the companies mired in the controversy — MFRE and FHS — have the same owner, believed to be a UAE national.
According to documents, purported to be the copies of commercial licences of the two firms, the 38-year-old Emirati is the “establishment owner” of both firms.
According to Real Estate Regulatory Authority (Rera) rules, no one is not allowed to “own more than one real estate brokerage licence.”
Both companies had also claimed to represent 5,000 properties in Dubai.
MFRE has “collected around Dh300 million from subletting homeowners’ units before disappearing,” an Indian homeowner who cited a company source, said on condition of anonymity.
“I have an exposure of ‘only’ Dh125,000 with MFRE; I know people who stand to loose over Dh400,000,” he said.
“If you go to Bur Dubai police station or Rera you’ll see lots of people desperate for answers, with bounced cheques and contracts in hand.”
The brokerage house has said in marketing pitches, it manages scores of properties in Dubai.
Its office in Sama Tower on Shaikh Zayed Road appears to be closed and there was no answer at the front door when Gulf News visited on Wednesday afternoon.
Phones lines related to MFRE were also unreachable.
Both MFRE and FHS are registered with Rera, which is investigating the alleged scams.
Dubai rent scam victims are planning legal action in a bid to recover hundreds of thousands of dirhams lost in the swindle.
At a meeting Thursday, spurned clients of one company caught up in the scandal, FHS, took the step of consulting with a lawyer while they wait on the outcome of complaints lodged with Rera and Dubai Police.
A number of FHS clients said they are considering legal action, including Mohammad Al Khairy, whose Dh5,000 rent cheque payment by FHS has bounced.
“We will go to the law, follow the legal procedure. They (FHS) took one year’s advance rent from sub-letting to tenants and gave us bad cheques in turn,” Al Khairy said.
“Their office [in Pinnacle Tower along Shaikh Zayed Road] is closed; their phones are dead or [no one’s] answering. Where are they?”
Others have already filed police complaints over dud cheques. The development follows similar claims by clients of SMS, a ‘property’ company – only licenced for media services – whose owner has been accused of fleeing after making a fortune from subleasing.
Rera has repeatedly warned against dealing with unregistered brokers not listed and certified by it.
It is not clear what will happen to tenants living in units sub-let by FHS, MFRE and SES. They have been caught in the middle of a growing dispute between homeowners and the brokerage firms.
Strict regulations are in place to deter non-licenced people from preying on unsuspecting would-be tenants who believe they are dealing with a government-approved professional.
“There are regulations in place to prevent people from being exposed to fraud,” said the Rera official, noting that the authority has conducted public campaigns to make would-be tenants aware of the proper procedures.
Educated renters who know how the system works will be in a better position to protect themselves from fraud, he said.
The first thing for a tenant considering renting a property to do is to check the land department website — http://www.dubailand.gov.ae — and ensure that the property company’s name is on the Rera approved list of licenced real estate brokers.
Secondly, tenants can also check with Rera officials overseeing the Ejari rental contract registry to determine if there will be any problems registering the contract.
If the system does not recognise the real estate official, the validity of the transaction should be questioned.
There are set Rera regulations for firms that only act as a real estate leasing brokerage that link landlords and tenants to rent out properties.
Activity No. 702003 states that in order to set up a leasing brokerage, applicants must obtain a “certificate of good conduct from CID for all parties.”
Further to a mandatory Dh5,000 fee to be paid each year, both owners and staff must be registered with Rera, owners are not allowed to “own more than one real estate brokerage licence” and a branch office can only be opened if there “is a minimum of 15 sales brokers in the main office,” state the regulations.
