How to Check If a Rental Property is Legitimate in the UAE?
The UAE is a force to be reckoned with, serving as the gateway to the Middle East for the world. With its robust infrastructure, world-class amenities, thriving business environment, and numerous employment opportunities, it is no surprise that thousands of people from around the world relocate here each year in pursuit of a better life. This prompts the demand for affordable yet comfortable housing solutions, with rental properties often among the most searched options.
However, as lucrative as the real estate markets of the UAE are, if you don’t practice caution, you can find yourself at the mercy of scammers. It refers to a situation when a fake landlord tricks a prospective tenant into sharing credit card details or paying security deposits. Despite the strict UAE laws aimed at safeguarding the real estate market and investors, these scams persist rampantly.
But does it mean you, as a tenant, have no way to escape fraud? Well, this is where our guide comes to your aid. We are going to run you through everything about a property status enquiry and the red flags you need to keep an eye on to identify a rental scam in the UAE. This is your holy grail to protect yourself and your valuable money from going astray.
What Does Property Status Enquiry Mean?
To start, we are going to run you through the primary tool of investigation for your property, irrespective of whether you are renting it or purchasing it. A property status enquiry refers to a procedure that helps verify the current status and legal ownership of a concerned property. It helps make sure that the property you are interested in does not have any encumbrances, legal issues, or disputes.
It is paramount to conduct this procedure as it will help you in determining whether the property you are seeking is legitimate or not. For instance, for the Dubai real estate market, Dubai Land Department (DLD) oversees the regulatory process for property purchasing and renting. This makes it easy for buyers, investors, and tenants to verify the legitimacy of a given property.
Why Conducting a Property Status Enquiry is Crucial?
People across the globe view the UAE as the pinnacle of luxury and opportunities, especially the real estate market of Dubai, which is evident by how many foreign investors it attracts annually. But as viable as the market is, you need to understand that you are not immune to fraudulent activities.
As such, if you are looking for a rental property in the UAE, you need to ensure that you verify its legitimacy. Here are some additional reasons as to why conducting a property status enquiry is important.
Helps Verify the Property Ownership
Whether you want to rent out a studio apartment or a 1-bedroom apartment, or something as grand as a villa, you have to make sure the business or person renting out the property is the rightful owner of it. Doing a property status enquiry enables you to verify the ownership status of the property with the help of official records from the DLD.
Clarifies the Status of a Property
If you are looking for a rental property or considering buying an off-plan unit, a property status enquiry can help you gain clarity about the property's current status. You will get to know crucial details regarding the estimated completion date of the project, as well as if there are any construction delays.
Eliminates the Risks of Legal Disputes
If the property you are interested in renting or buying has underlying legal disputes, you may lose money or suffer long delays. A property status enquiry can aid you in uncovering any legal disputes or court cases that the concerned property is involved in, primarily protecting and safeguarding your interests in the long run.
Provides Security to Tenants and Landlords
By confirming the status of a property, you, as a tenant, get protected from all sorts of fraudulent activities. This evokes confidence among all the parties involved, and they can assertively proceed with the transaction.
Understanding Property Status Reports
If you are renting a property for the first time in the UAE, it is very much possible to get overwhelmed with the entire process. To help you understand a property status report, we are highlighting the key points you need to consider.
Ownership Details
This is the primary section of the report and will confirm the name of the legal owner or owners along with the date they acquired the concerned property. It is vital for tenants to make sure they are dealing with the legitimate owner or landlord.
Disputes and Legal Cases
If the property you are renting is involved in any legal disputes or cases, then the report will mention it under this section. This is a vital part of the report as it provides insight into any ongoing court case that the property might be involved in.
Encumbrances and Mortgages
Under this section, you will find pivotal information associated with the financial obligation that the property might have. This includes any outstanding debt, liens, or mortgages that must be spelt out before you start your tenancy in it.
Construction Status
As stated earlier, if you are thinking of buying or renting an off-plan property, you need to stay updated with its construction. This section will highlight all the current updates regarding the ongoing construction of the project, alongside any delays, if there are any.
Key Identifiers of a Rental Scam in the UAE
To make the job easier for you, we are mentioning some red flags that might come your way while you are looking for a rental property in the UAE. If you detect any of them, you need to act alert and protect your money. Here are some of them.
Copied Property Listings
Often, the most common identifier of a fake property is a copy-pasted or plagiarised property listing. Many scammers post rental properties using fake contact details and the names of reputed developers that don’t really exist.
Also, you will notice that their rental prices are unbelievably low, which is a trick to lure tenants. Remember, if a deal seems too good to be true, it probably is not true.
Fake Tenancy Arrangements and Title Deeds
Scammers often make tenants sign fake tenancy contracts to convince them of the legitimacy of their fake property. Such fake contracts can be easily made online, and they are used to convince tenants to pay for the security deposits or other allied charges.
In addition, another red flag that can come your way is a fake title deed. It can also involve any fake property ownership documents.
Landlord Reluctant to Meet in Person
Typically, a legit landlord will be more than happy to arrange a house tour for you. If the landlord of the property you are renting is reluctant to meet you in person, then you should definitely keep your radar up.
A sign of a scammer is to convince you to pay for the security deposits without giving you a tour of the house that you will be living in. If it is the case, do not agree to it under any circumstances.
Landlord Delaying Ejari Registration
Specifically speaking about the rental properties in Dubai, a landlord needs to register their property with Ejari. It is a mandatory online system that is overseen by the Real Estate Regulatory Agency (RERA). It offers legal protection for both the tenants and landlords by integrating their contracts into the legal system.
If you find your landlord refusing to finish or delaying their Ejari registration, just know that it is a visible sign of a rental scam.
Asking for Credit Card Details or Upfront Charges
If your prospective landlord asks for your credit card details, get alert, since it is a sign of a rental scam. Many scammers try to trick their tenants into paying ‘holding charges’ or any other upfront charges before allowing them to visit the property.
Keep in mind that any such payments before the signing of a tenancy contract are a big red flag.
How to Avoid Rental Scams in the UAE?
Now that you know how to identify the red flags while renting a property in the UAE, let us figure out the ways how you can avoid them.
Hire an Approved Real Estate Agent
The first order of business is to hire a licensed real estate broker. You need to find a real estate agent who is registered with an official regulatory authority such as RERA in Dubai. RERA is responsible for issuing a broker’s card to certified real estate agents, giving them the license to give valuable advice and service to their clientele.
Real estate agents know the nuances of the market and will have valuable insights that will save you from potential fraud.
Verify Property Listings
Irrespective of where in the UAE you are looking for a rental property, you must verify its listing. Every single emirate in the country has its own registered real estate authority.
For instance, for properties in Dubai, you can verify the listing from the DLD website or the Dubai REST (Real Estate Self-Transaction) app. So, get in touch with your respective authority in your emirate and save yourself from illegal activities.
Cross-Check Property Ads
When you are scouting the market for viable rental properties, we recommend you rely on trustworthy online portals and websites that have a healthy amount of positive reviews and testimonials.
Reliable web portals and websites carry photos that are free from any other foreign watermarks, and their photographs are not copied from other online sources.
Read the Tenancy Contract Before Signing
As a tenant, you must thoroughly read the tenancy agreement and verify all relevant clauses that are mentioned. From eviction rules to duration of stay, from amenities to rental prices, check everything is properly documented. If possible, get a lawyer to run through it.
Verify Title Deed
You should never rent a property without verifying the legitimacy of its ownership documents and title deed. Please make sure to cross-check the name of the rental deed multiple times and verify its authenticity.
Avoid Cash Payments or Upfront Charges
Never make cash payments for anything. Usually, tenants are required to pay security deposits and other allied charges. You should always pay them online, through a credit card, or a cheque.
If there is any rental fraud in future, any financial loss that you may suffer will be hard to recover from cash transactions, as they don’t have any official record.
To Conclude
Just because the UAE has some of the world’s most flourishing real estate markets doesn’t mean that you will blindly invest your money in renting or buying a property. Value your hard-earned money and verify the authenticity, status, and ownership of the property you are considering renting.
We hope our guide has helped you in grasping all the key details you need to be aware of the property status enquiry process. Keep all the red flags we mentioned above in mind, and if you detect any rental scams, immediately report them to an official regulatory body, such as RERA in Dubai. Protect yourself from financial losses and only invest in legitimate properties.