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Discuss this article (16 Comments)Time for agents to pay up
by This email address is being protected from spam bots, you need Javascript enabled to view it on Monday, 26 October 2009
Sometime this week, 38 families will find out whether they are to be booted out of their homes in Discovery Gardens, after paying a year’s rent upfront.
It is a sad and tragic story, especially for the families involved. And it is about time the estate agents involved stood up, took the blame and paid up. But will they? Will they heck.
Let’s quickly recap on what’s happened so far. The tenants on building 219 in the Moghul Cluster all paid up AED45,000 for one bedroom flats that they thought belonged to Corporate Business Solutions.
We now know that CBS has disappeared, and that the flats are actually owned by Meraas Real Estate. Most likely, the AED45,000 the tenants paid up has been lost and they face eviction (unless they pay up again).
The tenants say they rented the flats through property agents Palma Real Estate, Imperial Real Estate and Homeland, all registered with Dubai Real Estate Regulatory Authority (RERA).
These agents all happily took their commissions, drew up the contracts and stamped them.
According to law 85 from 2006, the agents are jointly liable with landlords for renting properties. So I would argue and assume that they are now liable for renting what turned out to be duff properties.
But will they accept this? Palma has since offered to pay tenants back their AED2,250 commission if they sign a letter absolving the firm of any liability and preventing any “action, transactions or decisions done or taken during dealings with CBS.”
Oh I get it now. Sign a letter promising never to sue us and we might give you AED2,250 back.
This is a joke and a disgrace. That AED2,250 should be refunded NOW, no letters needed. Assuming this was the average commission paid per flat, that’s AED85,500 gone into the pockets of agents for renting duff properties.
Where is that money now?
Yesterday we contacted Sarah Derbas, Palma marketing manager. She told us: “To be honest, that’s all we can do. We can’t offer them anything else...We were tricked as well.”
Hmm. I guess we must assume the stuff on the company’s website is outdated. It boasts: “Palma Real Estate, an industry leader in the Dubai property market, offers a personal and professional service, with a particular focus on the client’s satisfaction.”
I’m at least encouraged by what I hear from the tenants’ lawyer Osama Aborayah who says: “I am going to file a complaint to the Land Department against the agencies. This is a good aspect that we can go through because law 85 from the year 2006 states that they are jointly liable with the landlord, so we will try to gain what we can and get our money back.”
I know I have given estate agents a tough time in the past year. Now is their chance to redeem themselves and show some leadership.
Writing off a bad debt of AED1,710,000 between them – painful as it will be – would be a good start.
If they think this is expensive, trust me, a court case is far worse.
READERS' COMMENTS
Disclaimer: The views expressed here by our readers are not necessarily shared by ArabianBusiness.com or its employees.
UAE the NEVER EVER LAND
Posted by Hossam, dubai, uae on Sunday 1 November 2009 at 16:35 UAE time
After loosing money in Real Estate , I feel responsible to advise everyone who lives there not to invest in it anymore . Egypt , Saudi and North Africa are far more attractive and promising than the UAE . The UAE did a great job at the begining but lack of regulations damaged it.
my 2 cents..
Posted by Hossam, dubai, uae on Sunday 1 November 2009 at 16:35 UAE time
After loosing money in Real Estate , I feel responsible to advise everyone who lives there not to invest in it anymore . Egypt , Saudi and North Africa are far more attractive and promising than the UAE . The UAE did a great job at the begining but lack of regulations damaged it.
my 2 cents..
Agent's responsibality
Posted by Hamid on Saturday 31 October 2009 at 20:10 UAE time
I fully agree with Mr. Anil. It is the real estate agents job to check the ownership of a property before completing a deal. if it is not the agent's job then whose job is it? let that guy make the big buck! No excuse is acceptable. If an agent is not able to use the existing system in Dubai to verify the ownership of the property, then they need to either get out of the business and let some one who can do it, or take a gamble to be held liable from time to time for such fiasco.
Certainly the tenant who relied on a RERA registered agents, while paying full commission and rent, can not be expected to pay rent again! Tenants have neither the training nor the experience required to make a real estate transaction. That is why they hire agents and pay them the big buck.
I realize, since the property listing in Dubai is not exclusive, so it not be feasible for the agent to fully verify every and each property before marketing it, however once a deal is made, then the wining agent, who is making the deal, must fully check and verify all information, including the ownership information, before releasing any hard earned money released to an unscrupulous party.
I greatly sympathize with these tenants and wish them luck in their ordeal.
Posted by Hamid on Saturday 31 October 2009 at 20:10 UAE time
I fully agree with Mr. Anil. It is the real estate agents job to check the ownership of a property before completing a deal. if it is not the agent's job then whose job is it? let that guy make the big buck! No excuse is acceptable. If an agent is not able to use the existing system in Dubai to verify the ownership of the property, then they need to either get out of the business and let some one who can do it, or take a gamble to be held liable from time to time for such fiasco.
Certainly the tenant who relied on a RERA registered agents, while paying full commission and rent, can not be expected to pay rent again! Tenants have neither the training nor the experience required to make a real estate transaction. That is why they hire agents and pay them the big buck.
I realize, since the property listing in Dubai is not exclusive, so it not be feasible for the agent to fully verify every and each property before marketing it, however once a deal is made, then the wining agent, who is making the deal, must fully check and verify all information, including the ownership information, before releasing any hard earned money released to an unscrupulous party.
I greatly sympathize with these tenants and wish them luck in their ordeal.
Property Greed
Posted by Mark, Dubai, UAE on Tuesday 27 October 2009 at 17:45 UAE time
After all the dishonest dealings in property who will ever want to buy in the UAE.
Customers must agents that openly lie are charge huge commissions for the priviledge and developers like Hydra Properties that fail to deliver anything they have promised and are forcing their clients out by so called consolidation.
The whole industry is rotten and in dire need of regulation.
Posted by Mark, Dubai, UAE on Tuesday 27 October 2009 at 17:45 UAE time
After all the dishonest dealings in property who will ever want to buy in the UAE.
Customers must agents that openly lie are charge huge commissions for the priviledge and developers like Hydra Properties that fail to deliver anything they have promised and are forcing their clients out by so called consolidation.
The whole industry is rotten and in dire need of regulation.
real estate agents fees
Posted by robert h, dubai, uae on Tuesday 27 October 2009 at 17:03 UAE time
What have always found annoying is the fact the tenant pays for everything. The landlord employs the agent to rent HIS/HER property, agent advertises. We rent it and we pay the commission. Its like going into a car showroom purchasing a car and then being hit with the salesmans commision. We did not employ the agent the landlord did. Also why does the tenant have to pay DEWA tax on the property, it belongs to the owner. In other countries the landlord pays the commision, he employed the agent he pays the agent. The landlord or owner pays the taxes too.
Posted by robert h, dubai, uae on Tuesday 27 October 2009 at 17:03 UAE time
What have always found annoying is the fact the tenant pays for everything. The landlord employs the agent to rent HIS/HER property, agent advertises. We rent it and we pay the commission. Its like going into a car showroom purchasing a car and then being hit with the salesmans commision. We did not employ the agent the landlord did. Also why does the tenant have to pay DEWA tax on the property, it belongs to the owner. In other countries the landlord pays the commision, he employed the agent he pays the agent. The landlord or owner pays the taxes too.
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