Roundup: Series of real estate scams speckle Dubai's property market recovery
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E-mail Xinhua, September 17, 2012
Roundup: Series of real estate scams speckle Dubai's property market recovery
DUBAI, Sept. 16 (Xinhua) -- After a series of "good news" in the Dubai real estate sector this year, a number of multi-million dollars fraud cases rock the Gulf Arab sheikhdom.
According to local media reports, a number of brokerage firms disappeared with the money they should have had transferred from tenants to home owners. Gulf News reported earlier this month that two broker firms, MFRE and FHS, were owned by a 38-year old Emirati national, although the Real Estate Regulatory Authority or RERA allows one person to obtain one brokerage license.
Both cases are the latest of a series of property scams that came to light since the start of September. Media reports suggest that the entire truth of the scam has not become fully visible.
The scandal comes at a time when things looked to improve at Dubai's real estate market this year. Rental prices increased slightly in the first half of this, the first advance after three years ago when the global financial crisis triggered a real estate crash in the emirate. Most developers return to profits and the highest residential building, the 414 meters high Princess Tower, was inaugurated on Sept. 12.
But the joy after another property record was overshadowed by new revelations over the alleged fraudulent actions by some real estate brokers.
Both firms, MFRE and FHS, claimed to represent 5,000 real estate objects in Dubai. Meanwhile, the two entities vanished and their offices at Dubai's main artery Sheikh Zayed Road are shut down.
Gulf News quoted a victim of the property scam who said he lost 125,000 Dirham (34,000 U.S. dollars). Others claimed they lost 400, 000 Dirham or 108,000 dollars, because they handed out cheques to one of the two brokers which were meant to be paid as a rent to the owners of the object in which they live.
When home owners realized that no rentals entered their accounts, they confronted the broker firms and the tenants and the whole disaster became clear.
The daily newspaper said further MFRE alone collected some 300 million Dirham (81.75 million dollars) before the firm and its owner disappeared and their remains were shrouded in silence.
Meanwhile, RERA publicly advised individuals to check out all rental contracts before signing them with the regulatory authority.
The latest scandal in the glamorous city in the Gulf also shows that despite RERA and ongoing installations of tougher laws and controls, cheaters still find their way to rip of customers in a blatant manner. Enditem
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