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  • Writer's pictureAkram Cheik - Lawyer

GUIDE TO REAL ESTATE AGENTS IN DUBAI: Real estate agent regulations summarized

The real estate agent or real estate broker in Dubai is a professional specializing in the sale, rental and management of real estate. This job consists of helping clients find the property that meets their needs and budget, negotiating the terms of the transaction and ensuring that all administrative formalities are correctly completed.

The real estate market in Dubai has been growing rapidly for several years, which has led to an increasing need for the services of qualified real estate agents. The demand for quality housing, economic growth and the increase in the number of foreign investors are the main causes of this boom. In particular, with French customers who are one of the most demanding in this area, to respond to these requests, many agencies run by French people have appeared and are advised by our teams.

In addition, the profession of real estate agent in Dubai is highly regulated to guarantee the protection of the interests of clients and investors. Estate agents must be registered with the Real Estate Regulatory Agency (RERA) and undergo continuing education to keep their skills up to date. Moreover, the regulations being sometimes unknown by the agencies, the text below will be able to help people wishing to embark on this profession, but is also intended to answer the questions of the agencies as to the ethical behavior and the regulations that they must adhere to in order to remain compliant.

1 - Registration with the RERA to become a real estate agent

In order to carry out the brokerage activity in the emirate of Dubai, it is mandatory to be licensed by a competent entity and to be registered in the register maintained by the DLD. This register must contain the details of the brokers authorized to practice this trade and any variation or modification of this information must be updated in this register. Brokers can be classified into two categories: category A for experienced people approved by the President but not approved by the competent entities, exempt from the obligation of registration in the register, and category B for people who exercise the brokerage activity under licenses issued by the competent entities.

2 – Conditions of registration in the register of real estate brokers in Dubai

To engage in brokerage business in the Emirate of Dubai, a Category B Person must submit an application for registration to the Register at the Division using the required form. The application must include a valid business license, Dubai Chamber of Commerce and Industry membership certificate, copy of passport(s) for sole proprietorships or corporations, copy of title deed or contract of lease of premises, certificate of good conduct for sole proprietor or managers, lack of bankruptcy or criminal history for managers or managing partners, certificates of completion of property training courses real estate, and passing the brokerage profession test prescribed by the DLD. The Division reviews applications and may request additional information. The request is submitted to the Committee within 7 working days, and the Committee can approve or reject the request with a justification in case of rejection. The applicant can submit a new application within 14 days of notification of the rejection decision. Once registered, a Broker receives an identification card with his name, address and Registry registration number, and must include this information in all correspondence and reports. Registration must be renewed annually with the Division with an application submitted at least 30 days prior to expiration.

3 – The ethical obligations of real estate agents in Dubai

All registered brokers must comply with the code of ethics prepared by the committee in consultation with experienced and knowledgeable persons. They must record all transactions they carry out in their own file, keep all documents relating to these transactions and provide a copy on request to the contracting parties. In the event of VEFA or sale on model, the broker must keep the plan or the model until the completion of the transaction. Brokers must provide all information, data and statistics on their brokerage activity upon request from the DLD.

They must disclose to their client and the other contracting party all important details about the negotiation and the brokerage process to enable informed decision-making. The broker cannot negotiate any transaction that is illegal or in violation of the regulations in force in the emirate. Even if the broker is engaged by only one party, he must present the details of the transaction fairly to both parties and inform them of all relevant conditions. He is liable to the parties for any fraud or fault committed. The broker cannot present himself as a party to the contract without the authorization of the parties and without the right to fees.

He is considered as fiduciary for any amount, title, obligation or item given to his custody or for delivery to the other party and must return or deliver them according to the conditions stipulated. The broker is responsible for any loss or damage suffered by the contracting parties as a result of its fraudulent or deceptive act or failure to comply with the applicable rules. If the broker fails in his obligations towards his client or accepts an illegal promise of advantage from the other party, he loses his right to fees or reimbursement of his expenses.

If several brokers work on the same contract, they are jointly and severally liable, unless authorized for joint work. If several people hire the same broker for the same mission, they are jointly and severally liable towards him.

4 - Remuneration of real estate brokers in Dubai

A brokerage agreement must be in writing and include the names of the contracting parties, the details of the real estate and the brokerage conditions. It must also be recorded on the folio of the property to indicate its existence. Brokerage fees can be negotiated or determined according to current practices. The broker is entitled to his fees only if he leads to the conclusion of a contract between the parties. Fees are paid upon signing and registration of the sales contract, unless the brokerage agreement specifies otherwise.

If the conclusion of the contract is subject to a condition provided for in the brokerage agreement, the fees will be paid once the condition has been fulfilled. In the event of termination of the brokerage agreement, the broker may claim his fees, unless he has committed fraud or gross negligence. If the broker's negotiations do not result in a contract, he is not entitled to any compensation or reimbursement of expenses.

If several brokers participate in the negotiation and lead to the conclusion of a contract, they will share the costs. If a party engages several brokers for the same assignment and only one broker leads to the conclusion of a contract, this broker will be entitled to the full fees. The broker can only receive fees from the party that engages him. If the broker is engaged by both parties, they will be jointly and severally liable for paying their share of the fees.

5 - Settlement of real estate disputes in Dubai

A Dispute Resolution Council made up of 4 people and a legal adviser belonging to the DLD is in charge of settling disputes arising around the sale or a contractual relationship concerning real estate. It defines the competences and procedures of the Council, as well as the secretariat which provides administrative support.

The Board will only intervene in the event of a brokerage dispute provided for by the brokerage agreement or accepted by the parties in dispute for an amicable resolution.

The Board should follow the principles of law and strive to resolve disputes promptly. Council decisions can be conciliatory and are not always bound by rules of law.

The Board Secretariat receives applications, notifies parties, maintains records, etc.

To submit a request for amicable settlement, the claimant must complete a form and provide the necessary supporting documents. The adversary must respond within one week. The Council must rule on the dispute within thirty days.

6 – Sanctions, penalties and loss of real estate brokerage status in Dubai

The Committee may impose sanctions on any real estate broker who violates the regulations or the resolutions or instructions resulting therefrom, such as a notice, a warning, a suspension of activity for up to six months or inclusion on a blacklist. If a broker violates the code of ethics, commits a flagrant violation of the laws in force or receives three black points, his registration in the register will be revoked. The dismissal will be final and takes effect on the recommendation of the committee and on the decision of the general manager. The division must notify any decision to suspend activity or revoke registration to all the competent entities. A person also ceases to be a broker and his registration will be revoked if he permanently ceases his activity, suspends his activity for more than twelve consecutive months without a reason acceptable to the Committee, ceases to meet the requirements of the regulations, has provided false information to the division or if the president's resolution revokes his registration.

7 - Final provisions of the rules

Finally, active brokers must comply with the provisions of this regulation within six months of its publication, with a possible extension of three months granted by the President for valid reasons. The Committee may classify brokers according to their specialization and limit their number with consultation of the Competent Entities. The DLD will collect fees for services provided under the rules, which will be determined by decision of the President. The President issues the ordinances, resolutions and instructions required for the implementation of the regulations. The latter enters into force on the day of its signature and will be published in the Official Journal.

Akram Cheik, Lawyer

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