A holiday lettings scam in Dubai could have netted criminals tens of millions of dirhams, an agent who sold Evernest Holiday Homes has said.
An employee who joined the company in 2020 exclusively told The National how it quickly expanded from only a few properties on the books to more than 200 and two teams of more than 20 agents.
Tenants and landlords duped by the property management company before it vanished at the end of last year are likely to have lost a total of as much as Dh48 million in deposits, fees and rent paid in advance.
Dubai’s Department of Economy and Tourism (DET) has confirmed it is investigating the case.
“We consistently advise all guests and investors to review the relevant guidelines advised in the 2020 Holiday Home Guide to ensure their rights are protected,” said Khalid Saeed bin Touq, executive director of Tourism Activities and Classification at the DET.
Victims can report concerns or scams at firstname.lastname@example.org or by calling +971 600 55 5559.
Bargain price rental deals
The scam involved Evernest leasing properties from landlords, promising high returns through rental income from sub-leasing the properties above market rates.
What occurred in reality was quite the opposite.
Evernest provided the property owners post-dated cheques, and then sub-leased the properties at extremely low annual rent.
The catch was that Evernest’s bargain-hunting tenants paid the entire year's rent upfront.
The agent, who used the name Jason, which is not his real name, said landlords were probably owed about Dh25 million and tenants had paid up about Dh22.5m.
“At first, the three main owners were quite casual and the targets were not that crazy so there was no stress,” said Jason.
“It was easy for me to climb the ranks as there were not many employees at the time.
“We started to hit our targets and that was when we started to expand.”
Business appeared to be booming for Evernest at the end of 2021, with more than 60 apartments rented out in the final quarter of the year.
Basic salaries for agents were relatively low at about Dh5000, but they could double that in sales commission.
“At the end of 2021 they asked us to hand in all our mobile phones as they didn’t want us to be bothered with work over Christmas,” said Jason, who estimates he is owed about Dh12,500 in salary payments.
“They were promising landlords a lot more than they were asking from the tenants, so it didn’t add up at all.
“We were told a new team was coming in. When I look back now I realise that was the exit strategy.”
Empty 17th floor offices in the Sidra Tower in Al Sufouh and at API Trio Office Tower in Barsha are the last remnants of the scam, now being investigated by authorities.
Victims with nowhere to go
British IT worker David, who did not want to give his real name, handed over Dh108,000 to rent a high-rise apartment overlooking Dubai Marina.
Like more than 450 other tenants and landlords, he was left shell-shocked after realising the company has vanished owing millions of dirhams, only days after his cheque was cashed.
“It was my first rental after recently moving to Dubai,” said David, who works for an online payments company.
“I was told the place I was looking at in Dubai Marina would be only taken off the market once I had paid a deposit.
“As soon as I told the agent I had sent the money the communication stopped.”
Two days later, with still no news of a move-in date, David managed to contact an agent who confirmed his worst fears that the money was gone and he had lost his dream home.
Evernest Holiday Homes registered as a company with the DET, but its tourism licence is due to expire later this month.
Registered holiday homes in Dubai can only be legally rented out for a maximum term of three months.
Canadian businessman Michael, paid a full year in advance for an apartment in Dubai Marina in September.
“They asked for Dh100,000 upfront, and Dh8,000 security deposit and some other administration fees,” he said.
Michael, who also did not want to give his real name, moved in to his apartment overlooking Dubai Marina with spectacular views across the Bluewaters Island and beyond in early November.
He had no contact with the landlord until the man knocked on his door on Tuesday to serve an eviction notice.
“I had no idea what was going on and I was shocked," said Michael.
“I was suspicious when the cleaning lady did not show up two weeks ago.
“I tried calling Evernest to find out what was going on but none of the numbers worked.”
A trip to the Evernest office in Barsha confirmed his fears, with an abandoned premises except for another landlord and tenant in a similar plight.
Scores of complaints had been pinned to the door of the company’s main administration office.
Some tenants are waiting for a knock at the door from angry landlords threatening eviction, while others have already been disconnected from utilities and are without power and water.
The DET urged people looking to rent properties to follow the guidelines.
Khalid Saeed bin Touq, executive director of Tourism Activities and Classification at the DET, added: “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.”
Landlords offered legal advice
Michael Kortbawi, a lawyer at BSA Legal in DIFC, said those behind the fraud can expect to be hunted down.
“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,” he said.
“That would likely lead to the arrest of the perpetrators in whichever country they have now fled to.
“Further forensic work would be carried out in an attempt to trace the money obtained as a result of the fraudulent scheme, ideally resulting in compensation for the victims.”
Mr Kortbawi advised tenants to always check a landlord’s documents, and request proof that the party they are renting from has the authorisation to sub-lease a property.
“Landlords will need to take legal action against Evernest in order to get a conviction of fraud,” he said.
“This appears to be a clear case of fraud, evidenced by its well-planned scheme to deprive the ultimate landlords of rental income, so Evernest can gain the largest amount of rent from its tenants before suspicions are raised.
“The goal would be to get an arrest warrant against the managers of Evernest followed by tracking and seizing of the fraudulently obtained money."
Mr Kortbawi said landlords could consider legal advice before taking out eviction notices against tenants who secured their homes at under market rates.
“They should seek to reach an agreement where the tenant pays additional rent with an extension to the lease, thereby reaching a fair outcome for both parties,” he said.
Evernest Holiday Homes has been contacted for comment.