x Abu Dhabi, UAEMonday 24 July 2017

More frequent rent cheques would cut fraud

A change to the annual-payment practice, and the vigorous pursuit of the Dubai scammer, will help restore confidence in the rental system.

The first three victims of Dubai property fraudster Haitham Al Kouatly are to be evicted from the properties they thought they had rented in good faith. Rulings in the three cases before Dubai Municipality's Rent Committee were made public on Saturday.

Many others may face the same fate. The Saudi businessman vanished in August, taking with him Dh6 million in other people's money. At least 130 people had given him and his company, Shamyana Entertainment Services, cheques for a full year's rent. Another 350 people lost quarterly payments.

The Rent Committee, reviewing the cases individually, has a lot more work to do. Plainly, however, these cases will be a precedent, because the Committee has made the only possible decision: landlords are not required to provide free housing. Many of them need to find new, paying tenants if they are to make their mortgage payments.

But that does not soften the blow for the tenants. Nothing will, as things stand. Indeed their frustration would have increased when they were required to pay 3.5 per cent of the contract value for the privilege of filing a complaint. That fee should be waived in these cases.

There is one important measure that could greatly reduce the danger of such scams in future: do away with full-year rent cheques.

No existing law requires the common practice of landlords demanding to be paid in advance for a full year; the practice is a holdover from the days when property owners had the upper hand, as the populations of both Dubai and Abu Dhabi were growing faster than the housing stock.

And conditions have changed: as more housing has become available in recent years, the grip of the 12-month cheque has rapidly weakened. Now the time has come for the authorities to decree that rent payments are to be made four times a year, or six, or even 12.

There is one other thing that can be done - and is being done - to prevent a repetition of this debacle: a vigorous law-enforcement and diplomatic effort to find the fugitive.

He fled to Beirut, police have established, but then he vanished. Interpol has issued a warrant and the world's police are watching for him.

Some day, we hope, he will stand trial and have to look into the faces of the people he cheated.