Do your homework first

Do your homework first

Although there are daily good news stories about the real estate market right now as the UAE bounces back from the global recession, there are also a few alarming reports that suggest not everyone has learned the important lessons when it comes to conducting property transactions.

By Renan Bourdeau (PROPERTY FOCUS)

Published: Sun 31 Mar 2013, 10:04 PM

Last updated: Sat 4 Apr 2015, 9:14 AM

I have been dismayed to read that people are still being duped by so-called ‘property agents’ (unlicenced of course) who are commiting serious offences such as leasing a property, paying the first installment to the landlord, before fleeing town with the rest of the cash.

Or, in more serious cases, fake brokers who illegally amass thousands of dirhams in complex leasing rip-offs that leave both tenants and landlords flat broke.

Although these fraudsters are no doubt very plausible and do their research to ensure their scams succeed, I can’t help but think of the saying: “fool me once, shame on you; fool me twice, shame on me.” That may sound a bit harsh, but if newspaper headlines over the past ten years have taught us anything it is that you must take basic precautions when renting a property or you will end up getting stung.

So where do you start? Well, when you decide to use a property company check out its trade licence number first (just ask them for it) with the authorities to make sure it’s genuine. In fact, if you’ve never heard of the agency that may well be a warning sign — the reputable ones should be well advertised. When you’ve confirmed that the trade licence exists, check what operational activities the company is actually permitted to carry out by Dubai’s Department of Economic Development (DED).

The Real Estate Regulatory Agency (RERA) is your best friend at the next stage as they will only give a company or property agent a broker’s licence if they are sure the outfit is legitimate. So peruse their website for information or give them a call if you have any concerns or questions — that’s what they are there for after all.

When you’re satisfied with these basic background checks and the matter of laying down money comes up make sure that cheques only bear the name of the landlord as the beneficiary. If a management company oversees the property make sure they have a notarised power of attorney that allows them to collect cheques on behalf of the owner. At the very least, you should demand to see the authentic title deed and have a copy of the property owner’s passport or identification card.

In the event a third party is required to sign the lease, they should show a notarised power of attorney from the owner stating that they are given the capacity to do so. If this is not available, the third party needs to at least have a legally binding power of attorney from the Dubai Notary Public.

One really important development in the past couple of years is the development of the Ejari system, a new platform that registers all tenancy contracts with RERA. Once this is done, you should be given a certificate number from Ejari — be warned: if you miss this step your contract is considered void.

And as last year’s problems on the Palm Jumeirah showed all too painfully, another important point to think about is payment of servicing fees. Renters must ask for a document from the developer or the Owners Association stating that all service fees were paid by the owner prior to moving into the property. This will ensure you have no problems accessing the conveniences of the building you’re signing up to.

In the end it’s really quite simple, don’t take anyone’s word for anything! Legally binding documents for everything is a must and if your gut feeling tells you something is amiss — walk away.

No matter how many safeguards the industry and government puts in place, there will always be unscrupulous people out there looking to cash in on ignorance or confusion. So do your homework and take that extra bit of time to check and recheck the fine print.

The writer is the managing director of Views expressed by the author are his own and do not reflect the newspaper’s policy

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