For inquiries
Kuwait
After more than six years of addressing the real estate fraud crisis and significant progress made by the government from 2017 to 2022 to eliminate this phenomenon, real estate fraud cases are once again resurfacing, particularly through real estate brokerage. Recent activity on social media has revealed many cases of real estate fraud, with some individuals impersonating real estate brokers to carry out deceptive operations under the guise of accredited real estate offices. To understand the reasons behind the resurgence of real estate fraud in brokerage and explore the potential solutions, Al-Seyassah met with several real estate brokers.
They stressed the need to tighten control over unauthorized individuals in the profession, enhance societal awareness of real estate transactions, and increase penalties. Additionally, they advocated for the adoption of digital contracts and transitioning from paper to digital formats for all types of agreements, including sales, rentals, and assignments, to prevent individual fraud cases from evolving into a widespread, difficult-to-control phenomenon. In this regard, the head of the Real Estate Brokers Association Imad Haidar explained that the resurgence of real estate fraud is due to several factors. Most important among them are the weak oversight by government agencies concerned with real estate, a lack of real estate cultural awareness among citizens, and the failure of some brokers to prevent interactions with unauthorized individuals in the profession.
Additionally, the absence of strict legislation and severe penalties for unlicensed real estate practitioners has led to market chaos. Haidar stressed the need for organizing and licensing advertising across all media platforms including social media, with the goal of blocking unlicensed advertisements. He also highlighted the importance of requiring a broker’s contract for any property transactions in the Real Estate Registration Department, as this is the only type of contract monitored by the Anti-Money Laundering Department, adding that without such oversight, other contracts remain susceptible to money laundering risks. Haidar explained that real estate fraud employs various tactics, including the temptation of prices, high returns, sales on plans, sales of properties under construction, and fictitious companies. To prevent a recurrence of such issues and protect investors from becoming future victims, it is essential to address these problems comprehensively.
This involves transitioning from paper to digital contracts for all types of agreements – sales, rentals, and assignments. By doing so, the aim is to prevent individual fraud cases from escalating into widespread, difficult-control phenomena and ensure that affected parties can seek recourse through the judiciary. The owner of Al-Sagheer Real Estate Company Mohammed Al-Sagheer highlighted a recent rise in fraud cases on social media involving rental, sale, and purchase transactions.
He also highlighted many cases of fraud related to renting chalets in Khairan, something that the Ministry of Interior had been warning about but some individuals continue to fall victim, despite these warnings. Al-Sagheer indicated that this issue may stem from fraudsters exploiting data of actual chalets on social media, promoting it through fake companies, and artificially inflating their credibility with a large number of likes and followers to deceive potential victims about the safety and reliability of the company. He said, “We have also observed recent fraud cases involving apartment rentals in investment buildings, where advertisements offer distinctive apartments at less than 50 percent of their actual value. This tactic prompts individuals to rush and pay a deposit via an electronic link to secure the apartment, fearing they might miss out.
After receiving the payment, the fraudsters close their phone lines and disappear. Additionally, some scammers persuade victims to rent apartments for six months in advance, using real photos of the apartments taken from legitimate broker websites in order to convince them of the opportunity’s authenticity. Unfortunately, due to a lack of awareness about modern fraud techniques, some people end up losing hundreds of dinars.” Al-Sagheer affirmed the importance of community awareness regarding modern fraud methods. He said, “While real estate fraud is challenging in buying and selling transactions in Kuwait, it is more prevalent in rental situations. This is due to the differences in the targeted demographics.
Younger individuals, who are often less experienced in real estate matters, are more likely to fall victim to rental fraud compared to those involved in buying and selling, who generally have greater real estate knowledge. Female heirs are particularly vulnerable vulnerable to real estate fraud. If we refer to fraud cases in exhibitions and chalets in Sabah Al-Ahmad area, we will find that over 90 percent of those affected were female heirs. This is because women often hesitate to seek advice or do not fully understand their financial situations, leading them to invest in under-construction apartments. They may end up paying multiple installments only to discover, too late, that they have been scammed and have lost tens of thousands of dinars.”
The General Manager of Al-Jun Real Estate Company Ahmed Bou Abbas affirmed that increasing penalties and regulating the activities of real estate brokers and intruders in the profession, as well as implementing unified electronic contracts for all sales, purchase, and rental transactions are essential measures to combat real estate fraud. Bou Abbas reiterated that home licenses contribute greatly to the proliferation of itinerant brokers and intruders in the profession, thereby exacerbating fraud and harming the Kuwaiti real estate market. He called for a reassessment of real estate brokerage activities, suggesting that they should be categorized as private-sector activities. Bou Abbas stressed the need to prioritize the interests of all parties involved – sellers, buyers, and citizens – before the integrity of real estate as a safe haven for investors’ money is compromised.
For more Information contact: www.dxrprop.ae
Call/WhatsApp: +971542472218
Email: alnashra2013@gmail.com
– To write a special article about the name of your organization or company, you can write to the following email: