Welcome to Lawgical, the UAE’s first and only legal podcast that we are aware of. My name is Tim Elliott. Lawgical comes to you from the Dubai-based legal firm HPL Yamalova & Plewka. As ever, here is the managing partner, Ludmila Yamalova. Good to see you.
Ludmila Yamalova
Good to see you too, Tim. Thanks for being here.
Tim Elliott
This episode, Ludmila, is all to do with those ever-popular characters that we call real estate brokers. Now, in our last podcast, we were talking about transferring property. We got into some of the nuances of deposit checks before you come to transfer property and the importance of real estate brokers. In some ways, it’s almost as though they are custodians—perhaps that’s the best way to put it.
It’s easy to paint all real estate brokers with the same brush. There are as many good ones as there are bad ones. I’m not here to bash anyone, but there are some things you need to know before entering into a relationship with a real estate broker. The first, I guess, is that the involvement of a real estate broker in a property transaction in the UAE isn’t required by law, contrary to what many may suggest.
Ludmila Yamalova
Indeed, and that’s a great start. I’ve been in this country for 14 years, and still to this day, this is a very common statement, if not an assertion, by many—either brokers or others. Yes, you are required, you must use a broker, you cannot buy or sell property without one. That is not the case. It’s never been the case. There is no law requiring you to have a broker.
If you do have a broker, there are regulations and practices that have evolved as a result of their involvement. But legally speaking, you are not required to use one. In practical terms, you don’t really need one either. In theory, it’s a simple process. You don’t need a lawyer; you don’t need a broker. The buyer and seller can sit together, draft an agreement, or just note something on a napkin, get the necessary no-objection certificates, and go down to complete the transaction.
In theory, yes. Let’s say you and I live on the same floor. I own my property, and you’re renting the property next door. Now you find out that I’m selling my property, and you want to buy it. We already know each other, we know the price, and you’re happy with it. At that point, it can be very simple because we already have a relationship—not just with each other, but also with the property and the management company.
In such cases, it’s much easier to go through the transfer process. In fact, we’ve managed many such transactions for clients without involving a broker. In these cases, a broker might even be an interference—same with a lawyer.
Tim Elliott
That’s a simple case, but it’s less common, especially in today’s booming Dubai property market. This boom is driven not by long-timers but newcomers buying property. Newcomers, by definition, don’t have established relationships, contacts, or knowledge of the market. This is where a broker is needed.
Ludmila Yamalova
Absolutely. If you’re new to the market and don’t even know where to start, a broker can be very helpful. With geopolitical issues driving interest in Dubai, many people want to invest here—whether to park money or relocate their families.
Dubai has also introduced various types of residence visas, making it more attractive to live, invest, or even retire here. Many newcomers are unfamiliar with the market and areas, so they rely on brokers to guide them.
A broker will consult you on the types of areas where foreign nationals can buy, explain the projects and communities, arrange viewings, and handle communication. While not legally required, a good broker can be very helpful.
Tim Elliott
You don’t have to use one, but it’s often sensible to do so—like hiring a lawyer. There are plenty of good brokers, but let’s talk about commissions and charges. If I’m not mistaken, there’s no law regulating commissions brokers can or should charge.
Ludmila Yamalova
Correct. There’s no law that regulates broker commissions. There are regulations for brokers at a high level. For example, a broker must be licensed in Dubai by the Real Estate Regulatory Agency (RERA).
To be licensed, brokers must pass an exam and be issued a RERA card. They must also be part of a real estate agency and cannot operate independently. RERA regulates brokers at this level, but these regulations don’t address commissions, ethical obligations, or what brokers must do to earn a commission.
Tim Elliott
So, there’s no regulation setting commission levels or mandating payment. By extension, you don’t technically have to pay a commission.
Ludmila Yamalova
Indeed. You don’t have to pay a commission. However, if you’ve hired someone to help manage a transaction and they do the work, it’s only fair to pay them for the service provided. That said, the practice has developed where brokers charge 2% of the purchase price. In some cases, it’s higher—3% or even 4%.
This is not mandated by law; it’s purely contractual. Interestingly, the buyer typically pays the broker’s commission, even if the broker represents the seller.
Tim Elliott
It seems like buyers bear most of the costs—paying for the privilege of buying, if you will.
Ludmila Yamalova
Indeed. All the burdens are on the buyer, especially in a seller’s market. Beyond the purchase price, buyers often pay a 4% transfer fee to the land department and an additional 2% to the broker. For example, if the purchase price is AED 1 million, the buyer pays AED 60,000 on top of that—AED 40,000 for the transfer fee and AED 20,000 for the broker’s commission.
Tim Elliott
It’s worth noting again that there’s no law regulating these commissions or the obligations of brokers when charging them.
Ludmila Yamalova
Exactly. While I fully support paying brokers for the services they provide, the key is that the service must actually be provided. A common complaint is that brokers charge high commissions but do little beyond bringing the parties together.
For more complex transactions—like when a property is mortgaged, or both buyer and seller are dealing with mortgages—there’s a lot of work involved. A good broker can manage relationships with utility providers, banks, and finance companies to facilitate the transfer.
Tim Elliott
It ultimately comes down to the level of service provided. Understanding the local system and nuances is critical, especially for international buyers unfamiliar with how things work here.
Ludmila Yamalova
Absolutely. However, one of my greatest pet peeves is the lack of transparency in the industry. Brokers often refuse to share contact details between buyers and sellers out of fear that they’ll be cut out of the deal. This mistrust undermines the process and creates unnecessary complications.
For example, brokers sometimes put their own contact details on legal forms instead of those of the buyer or seller. This is wrong on so many levels and should not happen. The market would be much healthier and more competitive if we addressed this issue.
Tim Elliott
It sounds like the industry could benefit from more trust and professionalism.
Ludmila Yamalova
Absolutely. There’s a massive need for qualified, hardworking, and professional brokers in Dubai. While there are some, the industry needs further development to foster trust among all parties.
Tim Elliott
That’s another episode of Lawgical. This time, we covered everything you need to know about real estate brokers in the UAE—transaction and commission tips included. As ever, our legal expert on Lawgical, Ludmila Yamalova, managing partner at HPL Yamalova & Plewka. A huge thank you.
Ludmila Yamalova
Thank you, Tim.
Tim Elliott
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