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Dh30 million Dubai holiday home rental scam: Residents left in the dark as landlords cut power, water supply

Utilities were disconnected without any warning, according to some of the distressed tenants

The multi-million-dollar Evernest Holiday Home rental scam uncovered by Khaleej Times earlier this week has left hundreds of Dubai residents groping in the dark.

If losing money to the fraudulent property management company wasn’t bad enough, now scores of tenants have their electricity and water connections cut off.

Victimised landlords act tough

Failing to evict them legally, their landlords have pulled the plug.

“I’ve been using candles and battery-operated lights for the past nine days. And because there is no running water either, we’re forced to buy bottled water for washrooms as well. We’ve been deprived of basic human needs, despite having paid Dh70,000 upfront for an entire year’s rent and Dh5,000 towards security deposit,” said a shell-shocked British national, who had signed up with Evernest for a one-bedroom apartment in Dubai Marina in May last year.

An Italian couple, who lives in Business Bay, shared a similar plight.

They found their power supply cut when they returned from vacation earlier this week.

“There was no warning, no notice, no nothing. We don’t know what to do,” said F.K who requested to be referred only by his initials.

A German woman, who rented a one-bedroom apartment in Boulevard Crescent for Dh73,000, said she is forced to live with her friends, as her utilities have been shut off without any prior notice. “I contested the move and got a favourable verdict, but the services continue to remain disconnected,” she rued.

Earlier, Dubai’s Department of Economy and Tourism (DET) authorities told Khaleej Times they are investigating the scam.

The modus operandi

Reprising tactics used by con artists in the past, Evernest approached homeowners with the promise of high rental returns from sub-leasing their properties above market rates. The same properties were offered to tenants at much lower prices. But there was a catch: they had to pay the entire year’s rent at one go.

Once the company had collected more than Dh30 million in advance payments from over 250 ‘customers’, its owners sent out a mass email, entitled 'Happy Holidays', to their staff in end-December, downed shutters of their Al Sidra Tower office in Al Sufouh, and overnight vanished without a trace.

Homeowners realised they had been duped in late December when the post-dated cheques issued to them bounced because of insufficient funds.

When they rushed to their homes looking for answers, they found them occupied by people who had paid the full year’s rent in advance and had contracts with Evernest to show that they were rightful tenants.

Denied rental income and access to their own homes, the landlords then resorted to disconnecting utilities to evict the tenants.

Landlords resort to ‘extortion’

The Briton, whose power was cut off last fortnight, said he got a court order to restore the supply but hasn’t had any success as the landlord is yet to comply with the verdict.

“I am aghast. Everest was supposed to pay my Dubai Electric and Water Authority (DEWA) bills as per my contract. After it disappeared, I offered to pay for the utilities myself but the landlord flatly refused. He said if I want the power back, I should renew my contract with an annual rent of Dh110,000. This is extortion,” he said.

The Italian couple said their landlord has demanded an additional Dh15,000 to restore power. “They want to push us into a corner so that we are left with no choice but to vacate the place,” said F.K. who paid a year’s rent (Dh58,000) upfront besides a security deposit of Dh7,000.

A French expatriate whose utility services were disconnected in mid-January said his life has been turned upside down. “I buy bottled water to take a bath, flush the toilet and wash the kitchen utensils. There is no electricity which means I can neither charge my mobile phone nor laptop. Unfortunately, I have to take leave from work and put up with this harrowing situation. I barely step out of my place, as I fear the landlord will break into my home and throw out my belongings if I’m not around,” he said.

Fear and uncertainty have gripped many others.

The legal recourse

Michael Kortbawi, a partner at Dubai-based law firm BSA Ahmad Bin Hezeem & Associates, said the property owners need to take legal action against Evernest in a bid to get a conviction of fraud.

“This appears to be a clear case of fraud, where a well-planned plot was hatched to deprive the landlords of rental income. Evernest wanted to make a windfall profit from the tenants’ rents even an alarm could be raised,” said Kortbawi. “The goal should be to get an arrest warrant followed by the seizure of the fraudulently obtained money,” he added.

He said property owners may also need to refrain from taking action against the tenants and instead seek to reach an agreement whereby the tenant pays additional rent with an extension to the lease. The arrangement could be a fair outcome for both parties, who have been duped.

“Fraud is an internationally recognised crime, which means it can lead to the involvement of Interpol, who could issue international arrest warrants for the perpetrators,” said Kortbawi. “That would likely lead to the arrest of the perpetrators in whichever country they have now fled to,” he added.

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DET’s help is at hand

The DET authorities said they are constantly engaged with stakeholders to help resolve any issues in the holiday home sector.

“We consistently advise all guests and investors to review the relevant guidelines in the 2020 Holiday Home Guide to ensure their rights are protected,” said Khalid Saeed bin Touq, Executive Director, Tourism Activities and Classification, DET.

“The DET Dispute Management Team is always available to support all parties and find amicable solutions. "Whenever a complaint is received from tenants, they will be directly informed of the outcome by DET after the investigation is completed. DET also regularly reviews the legislation and guidelines according to the development and evolution of the international tourism and hospitality industries,” said bin Touq.

“For those seeking help, we recommend that they escalate their concerns to our team by sending an email to ecomplaints@dubaitourism.ae or call us at [+971] 600 55 5559," he added.

mazhar@khaleejtimes.com