Brokers in Real Estate Transactions
- Real Estate brokers’ involvement in property transactions in the UAE is not required by law.
- This is unlike what some may insist on.
- In other words, there is no law, which requires parties to operate only through real estate brokers.
- This means that parties can transact directly and draft their own agreements.
- Furthermore, in Dubai, if parties deal without a broker, they do not need to use a template Dubai Land Department (DLD) forms.
- As such, they have more freedom and flexibility, not to mention saving on the broker’s commission.
- Importantly, this applies not only for buying and selling properties, but also for renting.
- Commissions for real estate brokers in the U.A.E. are not regulated by law.
- This means, among other things, that there is no law requiring a payment of a broker’s commission.
- Nor is there a law setting a minimum percentage for the commission.
- Therefore, it is entirely for the parties to decide 1) what the commission should be and 2) how it should be calculated.
- For example, it could either be 1) a percentage or 2) a lump sum.
- Similarly, the commission could be paid either:
- only when the transaction is complete, or
- in the event the transactions is not complete, a proportionate compensation for the work conducted by the broker, as of that time.
- In practice, in Dubai, brokers tend to charge 2% as their commission, and usually payable by the buyer.
- However, as there is no law regulating commissions, there are no specific guidelines as to what brokers can and cannot do, in connection with representing parties and charging their commissions.