DUBAI // The emirate's property watchdog is considering dipping into the Dh5 million security bonds that real estate companies are required to hold with it in a bid to settle disputes between landlords and tenants affected by the Shamyana subletting scam.
More than 350 tenants face eviction and more than 250 landlords could lose out on rental income after the owner of Shamyana Entertainment, Haitham Al Kouatly, fled the country with the tenants' 2012 rent cheques.
"The law in Dubai requires a guarantee bond of Dh5 million from all real estate companies with subletting activity," said a source at the Real Estate Regulatory Agency (Rera). "So if any dispute issue comes up, the rental committee can liquidate this guarantee."
In 2009, Al Kouatly told real estate companies he needed to rent apartments for his 500-strong staff.
He then posed as landlord and sublet the apartments in The Greens, Jumeirah Beach Residence and Burj Downtown, accepting single-cheque payments for rentals between Dh60,000 and Dh105,000, while paying landlords in four cheques.
Real estate companies found complicit in the scam may have their Rera guarantee bonds liquidated to solve disputes.
At a meeting of scammed tenants in The Greens on Tuesday night, a group of about 50 victims agreed to split the cost of a lawyer to represent their case jointly.
"We need the correct advice," said Ali, a tenant. "Those who went through real estate companies may be in a better position than others. But a fraud has occurred against all of us and we need answers."
Adel, another tenant, added: "Everyone has had their savings wiped out and people cannot afford a lawyer independently. Everyone is worried sick."
Rera's investigation of the scam, in cooperation with the Dubai Economic Development department, is still ongoing.
A source at the agency revealed the scope of Al Kouatly's scam was so complex that they had begun dividing complaints into three categories.
The first category deals with complaints about "companies that are not licensed to conduct real estate activities", the second covers "illegally renting out units without the approvals to do so" and the third "renting from real estate companies using counterfeit cheques".
To avoid falling for similar scams, Rera has urged all residents to register their tenancy contracts with their online Ejari system.