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Owners lament bounced cheques; Tenants face eviction

At least two dodgy companies in Dubai have duped hundreds of landlords of their rental income as the post-dated cheques issued by them have bounced.

Emirates 24|7 received a number of calls from property owners, who alleged the cheques issued by Shamyana Entertainment and another entertianment company, had bounced. Some of the owners said they were in the process of filing police complaints, while some reported the matter to the Real Estate Regulatory Agency (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.

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

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.”

He, however, claims it is becoming difficult for him to fly down to Dubai to recover the money.

“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 states.

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."

He informs that last week he was contacted by his landlord who told him to vacate the house.

"I refused to vacate and now the property owner has informed me that he has filed a complaint with the Dubai Municipality Rent Committee. I don’t know what will happen... I have already paid the rent for a full year."

Dubai’s real estate watchdog has been educating owners/renters to deal with registered agents and brokerage companies.

In July, Rera imposed fines totaling Dh900,000 on 22 real estate companies and brokerage firms during the first half of 2012 for violations.