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July 01, 2016


Residents Must Be Alert to Property Fraudsters, UAE Legal Experts Warn

Legal experts say there are precautions residents can take to prevent being defrauded by bogus landlords and property agents.

"Unfortunately, fraud pertaining to house hunters and tenants is on the rise," said Hassan Elhais, a senior partner at Al Rowaad Advocates and Legal Consultants. "To contain these frauds and to protect oneself there are certain things that should cause warning signs in the mind of the tenant.

"Some of these are never having spoken to or contacted the owner of the property directly, dealing with someone who is claiming to be a representative of the owner without any valid power of attorney, requests to make payments in any name other than that of the owner without power of attorney that expressly states that another person can receive and bank cash or cheques on behalf of the owner."

Mr Elhais said if any of these applied, prospective tenants should investigate further.

"If the person is claiming to be an estate agent then proof to the effect that he is a registered property agent, the title deed of the property and passport copy of the owner, recent and updated Tawtheeq documents and all persons' phone numbers [should be presented]. This should form part of the basic due diligence by any tenant."

Most important was the exchange of money.

"No money should be handed over to any person who does not satisfy the due diligence of the above," Mr Elhais said. "Cash should never be paid in a tenant-landlord transaction because it is untraceable. Cheques should be used."

Dubai lawyer Faisal Alzarooni pointed to Feda Jarad and her husband, Aiman Awad. He said the couple were not the first to be caught out by this type of fraud, where scammers use fake IDs, tenancy contracts and names to trick unsuspecting tenants.

"This type of scam is not too common but is definitely not unheard of," he said. "I would advise individuals making real-estate transactions to never deal in cash. By doing so, it makes it easier for the perpetrators to get away," he said.

"Request a power of attorney if you're not dealing with the owner directly. Finally, I would advise doing some due diligence. Make sure the agent is part of a reputable real estate firm."

Michael Adlem, a Mena fraud investigation and dispute services leader at Ernst & Young, said a common theme was to rush a client into a deal.

"That does not allow you the time to undertake some background research on the other party and to verify their credibility," he said.

"Verify the real-estate credentials with the authorities, ask for references and for their relevant identification and licence."

Abu Dhabi Municipality introduced Tawtheeq to register all leasable property and lease contracts to regulate the relationship between landlords and tenants.

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