Deal only with licensed companies, says Rera chief

Dh5m guarantee required to get property management license

The chief of Dubai’s Real Estate Regulatory Agency (Rera) has advised property owners and renters to deal only with licensed companies.

“Let them make sure with whom they are dealing and check out the licence of the company before they deal with them,” Marwan bin Ghalita
told Emirates 24l7.

His statement came after this website reported on Thursday that at least two dodgy companies - Shamyana Entertainment and another “Event
and Entertainment” company - in Dubai have duped hundreds of landlords as the post-dated cheques issued by them had bounced.

Some of the owners that spoke to said they were in the process of filing police complaints, while some reported the matter to the Rera.

Owners also claim that these companies did not have property management licence as the companies have to furnish a guarantee of Dh5
million to run property management business.

Zubin Firozi, Head of Property Management, Head Office, Better Homes, confirmed to this website that companies have to furnish Dh5 million
to the Dubai Department of Economic Development (DED) as bank guarantee to get a property management licence.

“As per local order 2/2003 if a real estate company wants to conduct the activity of ‘leasing and management of other peoples properties’
then a bank guarantee of Dh5 million is required by DED when issuing the business licence.

“That is why it is very important for landlords to engage a licensed professional property management company to ensure their investment is
safely being managed and get the required protection by law,” he stated.

The modus operandi followed by the two companies is similar. The companies would take an apartment/villa from the owner and issue four
post-dated cheques. Though they would orally tell the owners that they were renting the property for their staff, a clause to sub-lease would
be added in the addendum. In most cases, the original contract was never registered on Ejari system, which is mandatory in Dubai. The
companies would then lease the unit to a third person for a rent lower than the market rate, with the renter having to cough up the annual
rent in a single cheque.

“I own two apartments in Downtown and the cheques issued by the company that rented it have bounced. Although the company said it was
leasing the unit for their own staff, I found out they had leased it to a third person,” said an owner, who is yet to file a police complaint.

T Desai, an owner of an apartment in Jumeirah Village Triangle, who lives in the UK, said: “I rented my apartment to a company, but they
went on to sub-lease it. Now, the cheques issued by the company have bounced and I have filed a case against them in Dubai.”

“My contract was not registered on Ejari at the time as I had flown into Dubai only to let the property out and was not aware of any such
rules,” he said.

Meanwhile, tenants say they are being forced by landlords to vacate their houses, as they never signed any official agreement with them.

Jack Stein, who rented an apartment in Downtown, says: "I have paid the rent in one cheque and was issued a contract signed by the
property management company but the landlord name was different. They told me that they have a power of attorney to lease it, but I never
asked for it as the rent was almost 15 per cent cheaper than the market rate."

Last week he said he was contacted by his landlord who asked him to vacate the apartment.

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