Cheques made out by firm to more than 100 landlords had bounced.
Real estate brokerage to repay landlords millions
The owner of a Dubai-based real estate brokerage company has promised to pay back millions of dirhams it owes to more than 100 landlords after cheques made out by the firm bounced.
MFR Properties (MFR), which is owned by Mohammad Fahad Razaq, has had its company licence suspended by the Dubai Land Department (LD) as it investigates the issue.
The company, which has been in business since March last year, managed and subleased properties in exchange for paying the rent back to the owners in four cheques over one year.
However, landlords claim it has been simultaneously renting the properties out in exchange for one-cheque payments from tenants, and for a lower price than was signed with the owners.
Rizwan Ali signed a contract with MFR to rent out his a two-bedroom apartment in Jumeirah Lakes Towers in November last year for Dh61,000 to be paid to him in four cheques. But without his knowledge, he says the company leased the property for Dh52,000 in one cheque to the tenant.
Mr Ali said his first cheque cleared, but the second, due on February 10, bounced.
"This situation is just unbearable," said Mr Ali, who has filed a police case against Mr Razaq.
MFR's boss, Mr Razaq, said he plans to pay back all the landlords, which he estimates to be around 150, within the next few months.
"For some time, everything was messed up; but step by step we are solving all the problems," he said.
Mr Razaq, who was recently released from police custody over an outstanding payment of Dh2.5 million with one landlord, said MFR has closed down.
Another landlord, Omar Khaled, said he went to Dubai Real Estate Regulatory Authority (RERA) after his third cheque bounced.
"They already knew about MFR and what they were doing, but they couldn't tell me anything. What can I do as a landlord? I have no rights," he said.
An online forum created by the affected landlords reveals that some people have already been paid what was owed to them.
Landlord Mohammad Amin, who also filed a police case last week, said he was reimbursed the same day.
According to a statement from the LD, MFR's trade licence has been suspended "as a precautionary measure".
"The Dubai Land Department has immediately started to investigate the issue and is looking into the submitted complaints."