Real Estate Bullying

Tim Elliott
Hello and welcome to another edition of Lawgical, the legal podcast from the Dubai-based law firm HPL Yamalova & Plewka and still the Gulf region’s first and only regular legal podcast. I’m Tim Elliott, joining you from Reef Tower in Dubai’s Jumeirah Lakes Towers, JLT, at the firm’s offices with the Managing Partner, Ludmila Yamalova. Socially distanced, of course. Good to see you again, Ludmila.

Ludmila Yamalova
Great to see you too, Tim. Thanks for being back with us.

Tim Elliott
Now today, we’re tackling the topic of bullies—real estate broker bullies, to be specific. This episode of Lawgical focuses on a familiar scenario in Dubai: real estate brokers showing homes and charging a 5% commission on the annual rent. While that’s often standard practice, during tough times, such as when rents are lower than usual, some brokers resort to questionable tactics to secure their commission. It’s often a hard sell, and some brokers become extremely persistent. I know you’ve recently been assisting a client who was literally being bullied by real estate brokers. Can you share that story?

Ludmila Yamalova
Yes, it’s a true story and a very recent one, though not the first and likely not the last. What makes this case particularly noteworthy is that the client wasn’t renting a property, but buying one—a villa—which significantly raises the stakes. The commission amount in such transactions is much higher than for rentals, often running into hundreds of thousands of dirhams.

Tim Elliott
So the client retained a broker to help with this transaction?

Ludmila Yamalova
Correct. The client engaged a broker to assist in identifying suitable properties. Eventually, they found a villa they were interested in and requested the broker’s help in following up with the property owner regarding key details like the structural condition, pricing, and timing. Unfortunately, this broker proved to be unhelpful and unresponsive, which is, sadly, a common complaint we hear from clients.

Tim Elliott
How did the client handle this lack of responsiveness?

Ludmila Yamalova
Frustrated with the lack of assistance, the client began exploring options with other brokers. After viewing several other properties, they decided to revisit the villa they initially liked and proceeded with the purchase directly through the property owner’s representative. However, the first broker, who had been entirely absent during these discussions, suddenly resurfaced, aggressively demanding a commission for the transaction.

Tim Elliott
Was there any formal agreement in place?

Ludmila Yamalova
No, and that’s key. There was no agreement between the client and the broker specifying any obligation to pay a commission. Moreover, the broker hadn’t provided any meaningful services—no follow-ups, no communication, and no added value to the transaction. Despite this, the broker claimed they were entitled to a 2% commission, which amounted to hundreds of thousands of dirhams, given the high value of the property.

Tim Elliott
How did the broker attempt to justify their claim?

Ludmila Yamalova
The broker employed highly aggressive and unethical tactics. They inundated the client with phone calls, emails, and WhatsApp messages, threatening legal action. At one point, the client even received a call from someone claiming to represent RERA, encouraging them to pay the broker. This individual alleged that the broker had lodged a complaint and would stop at nothing to secure their commission.

Tim Elliott
That doesn’t sound like something RERA would typically do.

Ludmila Yamalova
Exactly. It was highly suspicious. RERA’s role is to regulate brokers and their conduct, not to pressure investors into paying commissions. We suspect this was a friend or associate of the broker attempting to intimidate the client. Regardless, RERA does not have the authority to block transactions or impose penalties on buyers without a court order.

Tim Elliott
What advice did you give the client in this situation?

Ludmila Yamalova
We advised the client that legally, the broker had no standing. Without a signed agreement or clear evidence of services provided, the broker’s claim was baseless. We also clarified that RERA could not block the transaction or interfere without legal grounds. We recommended either ignoring the broker’s demands or filing a complaint with RERA for harassment. If the behavior escalated, we suggested filing a police complaint for further protection.

Tim Elliott
What lessons can other buyers take from this case?

Ludmila Yamalova
Firstly, choose your broker carefully. Look for someone reputable and licensed by RERA. Secondly, if you sign a brokerage agreement, review it thoroughly to ensure the terms reflect your expectations. Avoid exclusive agreements unless you trust the broker completely, and specify the scope of their responsibilities, including timelines and communication. Finally, verify that the broker has the seller’s authorization to represent the property. These precautions can save you from similar issues.

Tim Elliott
That wraps up this episode of Lawgical. If you’re dealing with aggressive brokers or other legal challenges, remember to consult with qualified legal professionals. Ludmila Yamalova, Managing Partner at HPL Yamalova & Plewka, thank you for sharing your insights.

Ludmila Yamalova
Thank you, Tim.

Tim Elliott
To have your legal questions addressed in a future episode of Lawgical or to arrange a consultation, WhatsApp us at +971 52 525 1611 or visit lylawyers.com.