MoneyMindsDXB

The Dubai property market can be highly competitive, with apartments, villas, and rooms being listed daily. However, this fast-moving environment also creates an opportunity for scammers to take advantage of unsuspecting renters and buyers. While many agents and landlords are trustworthy, you must be vigilant to avoid becoming a victim of a rental scam.

How Real Estate Scams Work

The typical scam scenario goes like this: you find a listing for a property that looks perfect. The photos are stunning, the location is ideal, and the price seems too good to be true. And that’s because it probably is. The scammer, posing as a landlord or agent, often claims they cannot show you the property for various reasons—perhaps the current tenant hasn’t moved out, or they’re out of the country. They ask for a deposit to secure the unit and promise to send the keys. Once you send the money, they disappear, and you’re left with nothing.

Spotting the Red Flags

There are a few warning signs that should make you suspicious of a potential rental scam:

• Price below market rate: If the price is much lower than similar listings, it might be bait to lure you into a scam.
• Upfront payment: Be cautious if you’re asked for any kind of payment before seeing the property in person.
• Lack of access: Scammers often make excuses as to why you can’t see the property.

How to Protect Yourself

To avoid being scammed, there are a few steps you can take to verify the legitimacy of a listing and ensure you’re dealing with a legitimate agent or landlord.

1. Ask for Form A In Dubai, any property transaction must involve a Form A, which is the agreement between the property owner and the real estate broker, giving the broker permission to rent or sell the property. If the agent can’t provide this document, it’s a red flag.
2. Verify Ejari Registration Request a copy of the unit’s Ejari, which is the official tenancy contract registration document with the Dubai Land Department (DLD). This ensures that the property is legally registered and that the individual claiming to represent the landlord has the legal authority to rent or sell the property.
3. Request Title Deed and Tenancy Contract Ask to see the title deed to confirm the true ownership of the property. You should also request a copy of the tenancy contract if the unit is already rented, as this will help you verify the lease’s expiry date and any terms you should be aware of. If you’re taking over a property with a tenant, you must be aware of potential legal and tenant rights issues.
4. Meet the Agent or Landlord in Person If possible, arrange to meet the landlord or agent in person. This step helps establish trust and allows you to verify their identity. Scammers often hide behind fake online personas, so a face-to-face meeting can help confirm if they’re legitimate.
5. Carefully Review the MOU If you’re signing a Memorandum of Understanding (MOU), ensure that you read it thoroughly. MOUs outline the terms of the property sale or rental. Be wary of clauses that could penalize you later on, and ask the agency to remove any such clauses. This contract can protect you, so don’t sign anything without understanding it first.

Real Market Issues: Problematic Tenants

One challenge that some buyers or renters face is dealing with difficult tenants already living in the unit. Some tenants refuse access to their unit for viewings due to a poor relationship with the landlord, and these properties often get listed below market value. As a buyer, you must understand that taking over a property with a difficult tenant can be a headache. Such properties may seem like a good deal, but they come with potential long-term issues that could cost you time and money.

Flipping Off-Plan Properties

Scammers aren’t the only concern in Dubai’s real estate market. There’s also a trend where people put down the required 10% deposit plus the 4% DLD registration fee on off-plan properties (properties under construction), and then attempt to “flip” the unit for a profit before it’s completed. These listings are often labeled as “genuine resale.” While this isn’t necessarily a scam, it’s essential to be aware that flipping properties during the construction phase can be risky. Prices could fluctuate, and demand may not meet expectations, leaving you with a property that’s difficult to sell.

Conclusion

Dubai’s real estate market can be an exciting place to find a new home, but it’s important to proceed with caution. By doing your due diligence, asking for the right documentation, and being aware of the common pitfalls, you can avoid falling into tricky situations. Protect your investment by taking the time to verify the legitimacy of any property or agent, ensuring a smooth and successful buying experience.