DUBAI // Hundreds of tenants face losing their homes after falling for a con in which they inadvertently paid rent totalling as much as Dh1 million to a bogus property agent.
They claim the man, identified as a 34-year-old Saudi national in a passport copy he supplied his tenants, illegally amassed a fortune in a bogus subletting scheme that left both tenants and landlords stunned.
Last night a group of tenants met in The Greens to plan a course of action in an attempt to claw back their money, pay the landlords and stay in their homes.
The con began when the man, identified in papers as Haitham Mahmoud Al Kouatly, allegedly told real estate agents he was the chief executive of an events company, Shamyana Entertainment, and he needed to rent apartments across the emirate for 500 employees.
It appears he then illegally sublet the homes he had rented in The Greens, Views, Burj Downtown and other areas, telling prospective tenants he was the owner.
When the subletting began in 2011, he told tenants he would pay their utility bills as part of the rental agreement, and registered all of the homes with Dubai Electricity and Water Authority (Dewa) in his company's name. That year the landlords received their money.
However, this year, when contracts came up for renewal, he said they would be paying their own Dewa bills, but offered them a month's free rent if they paid a year's rent in advance. Faced with substantial savings, tenants paid a year in advance. It is now believed Mr Al Kouatly cashed those cheques immediately and left the country.
One tenant, Lyn, who asked to be identified by only her first name, said: "My lease was up for renewal in December, but since he offered me 13 months at a price of a 12-month lease, I agreed to one cheque. The cheque was cashed the next day. I found that surprising but didn't think too much of it because mutual friends had rented from him, plus I had lived in the apartment for a year."
Mr Al Kouatly, who told some tenants to call him "Sam" and claimed he was the grandson of a Syrian president, has not been heard from since last week.
"When I heard Sam had left the country from friends, I desperately tried all the numbers I had, but they said they didn't work for him anymore," she said.
"Then I got a note under my door from the real landlords saying there was a problem with the apartment and I needed to contact them. Nobody knows what to do."
Dubai Police confirmed the incident but said that only one case had been registered with them so far. They refused to comment further on the case.
Last night's meeting of jilted tenants from The Greens took place in the Al Tayyal building lobby and marked the third time they had met in the past week.
Those who gathered said they paid rents from Dh50,000 to Dh115,000 for studios, one-bed and two-bedroom flats in the Emaar development.
They said they had already approached various Dubai authorities, including police, Rera and Dubai Municipality's Land Department.
"Many of my neighbours have the same problem," said Mounir, who paid Dh55,000 in a single cheque. "We went to Rera and they told us there are more than 400 families with the same issue."
Rera said it had reviewed the 15 complaints received so far.
“We found the company has no right to deal in real estate activity and the complainants have been advised to take legal action to protect their rights,” said a Rera spokesman. “Some landlords told us they knew that the company was not a real estate company but the rent amounts was big and so they accepted his offer.”
Mohammed Al Sheikh, secretary general of Dubai Municipality rental committee, said they knew of the scam, but added that no official complaints had yet been forwarded to them.
An official at the Land Department said the issue would not be dealt by them as it was a criminal case, which should be handled by Dubai Police.
By the end of the hour-long meeting in The Greens, the group decided to consult lawyers and visit the Dewa office as soon as possible.
"Everyone has decided to first get Dewa sorted," said a tenant, who asked not to be named. "And do whatever they can to ensure they don't cut off. Our aim is stay here."
They also agreed they would invite the real landlords to meet the tenants either individually or as a group to discuss the situation and perhaps reach a compromise.
None of the tenants who gathered in The Greens had registered their leases with Ejari, the Real Estate Regulatory Agency's rental watchdog.
Alexis Waller, a partner at the law firm Clyde & Co, said the scam may have been detected earlier if tenants and landlords had registered their contracts under the Ejari scheme due to the ownership paperwork required.
"I believe it is likely to have been picked up," said Ms Waller. "The registration would not have gone through if ownership evidence was not presented or the agent was not properly authorised to register. Any subleasing taking place would also have become apparent."
- With reporting by Wafa Issa