By Staff writer
Dubai’s real estate regulator says S&K ignored warnings to fix its finances and continued to operate after closure order
Bankrupt Dubai-based real estate agency S&K Estate Agents has reportedly been fined for continuing to operate after regulators ordered it to close.
Dubai’s Real Estate Regulatory Agency (RERA) issued a series of warnings to S&K, also known as Smith & Ken, before finally revoking its licence and shutting down the firm, chief executive Marwan bin Ghalita told The National.
S&K allegedly continued to operate for another five weeks, before finally filing for bankruptcy on July 21, blaming a deteriorating property market in the emirate and inability to recruit quality staff as part of its decision.
More than 80 staff, in both Dubai and Los Angeles, and clients are owed money.
RERA said it is investigating claims the firm illegally asked tenants and landlords to write cheques to S&K rather than the person owed the money.
“Some time ago, we received numerous complaints on the activity of this company and had been meeting with officials and the owner, and sent warnings several times,” bin Ghalita was quoted as saying.
“We fined the company, but with continuous violations and non-compliance with the pledge by the owner, the company’s headquarters was shut down on June 14 in cooperation with the Department of Economic Development.”
Landlords were often told their rent payments were delayed because the company’s chief executive, Ben Smith, who was the sole cheque signatory, was out of the country.
At least two property owners who rented out their residences via S&K claim the agent has failed to pay them their tenant’s security deposit and hundreds of dollars they were made to pay to S&K in advance for petty cash expenses.
Carlos Cruz, a former lettings negotiator at S&K, told The National he is owed AED55,000 ($15,000) in commission.
In a statement issued at the time of its bankruptcy filing, S&K said its reputation had been damaged by client complaints.
It has not commented since.
This is precisely why Real Estate Agents should not be allowed to run thier own Client accounts, and should have to use proper 3rd party Escrow or Lawyer accounts as in other countries - there is so much Client money washing through Agents accounts it is scary - and no protection for the Agents - Landlords - Tennants - Buyers & Sellers ........ it was just a matter of time.....
The same old story, Rera have in many ways have made the real estate industry more safer.........but...... I have always maintained like any other country it should be done by exchange of lawyers,the temptation of handling such vast amounts is to much for some people or rather Real Estate Companies.
I know for a fact that some agents are still working in this field and are still owing people money........