Dubai : In Dubai, the business of buying and selling property is strictly regulated.
As per clause 2 of by-law No. 85 of 2006, only those who are licensed by competent authorities and registered with the Real Estate Regulatory Agency (Rera) are permitted to carry on with brokerage activities.
Licensing requirements
To begin the process, brokers must submit an application to Rera along with the following documents:
A valid trade licence issued by the Dubai Economic Department.
A membership certificate of the Dubai Chamber of Commerce and Industry.
A copy of the licence applicant's/applicants' passport with regard to sole proprietorship or companies.
An identical copy of the ownership certificate of the brokerage office or its lease contract.
A certificate of good conduct for the establishment's owner and the senior manager or senior managers of the company.
None of the company's directors or the partners authorised to run the company shall be from those who have previously declared bankruptcy or were convicted with a crime violating honour or trust.
Obtaining certificates of training courses specialised in the real estate field from institutions accredited by Rera.
Passing the brokerage profession test prepared by Rera.
Once these requirements are met, Rera shall examine the application and verify the documents within seven days from the date of submitting the application.
If found to be in order, it shall issue the successful applicant a broker card bearing the broker's name and address, and a registration number which will be used in all correspondence and reports. Each registered broker shall renew his registration annually.
The application shall be submitted to Rera in the form assigned for this, at least 30 days prior to the expiry date of the registration. Rera shall renew the registration after verifying the availability of the renewal conditions.
Anyone who carries on brokerage activities in Dubai without a licence shall be subject to prosecution under the UAE Penal Code.
Brokers' rights, obligations
All registered brokers must comply with the professional ethics according to the Code of Ethical Conduct prepared by Rera.
The broker must inform his/her client of all the details of negotiations, stages of mediation he/she is conducting and any information that is considered necessary, to enable the client to make an informed decision.
The broker shall not mediate to enter a transaction in violation of the laws and regulations applicable in the emirate.
The broker shall, even if she/he is only authorised by one party of the transaction, give them a faithful offer and inform them with all the circumstances.
He shall be responsible for any loss inflicted on any of the contracting parties as a result of deception, fraud or non-observance of the principles as per the provisions of the by-law, or the requirements of the Code of Ethical Conduct.
The broker may not establish himself as a second party in the contract in which he mediates to sign unless the contracting party allows him/her to do so.
In this case, the broker shall not be entitled to a fee.
The broker shall be a guardian on any amounts, securities, debentures or things given to him by any of the parties to keep or to deliver to one of the parties. He must give or deliver the same according to what is agreed upon.
Trust rules shall apply to the broker with regard to these matters.
The contract shall be in writing and stating the names of the contracting parties, specifications of the property and brokerage conditions. The contract shall be registered in the real estate registry.
The broker shall not be entitled to a fee unless the contract has been signed as a result of his efforts.
The contract shall be considered as entered into when the parties agree on all the issues therein.
The broker is entitled to the fee upon signing the contract by the two parties even if it was not executed, unless the agreement or the practice stipulates otherwise. If signing the contract is impracticable for a reason related to the client, then the broker shall be entitled to a compensation.
If the brokerage contract is revoked, the broker may claim his fees or keep the same if he received it, unless deception or a grave mistake was proved on his part.
If the broker's instructions or negotiations did not lead to signing a contract between the two parties, he shall not be entitled, in consideration of his endeavour, to claim any compensations, expenses or costs he incurred unless there was a prior condition or this was done in the special practice.
If more than one broker participated in the negotiation for one party to reach an agreement, each is entitled to a remuneration as if they were one broker.
The remuneration shall be divided between them as per the conditions of the contract between them.
Penalties and expiration of the brokerage capacity
Rera shall have the right to impose penalties on the broker who violates any of the provisions of the by-law, the decisions or instructions issued by Rera.
The registration shall be cancelled if he breaches the Code of Ethical Conduct or if he commits a substantial violation of the applicable laws, regulations in the emirate.
The cancellation shall be made by a decision issued by the director-general according to a recommendation from Rera, stating the reasons for cancellation.
The broker may file a complaint against the decision of cancellation with the chairman of the Land Department within 15 days of being informed about it. The decision of the chairman shall be final.
Subject to clause 13 of Law No. 13 of 2008, if Rera finds that a broker has committed an act or omission that constitutes an offence under Law No. 13 of 2008 or other legislation in force, the director-general of the Land Department shall prepare a report and refer the matter to the competent investigating authorities.
Cancellation
The broker shall be deregistered from the registry and his registration with the Land Department shall be cancelled in the following cases:
The broker leaves the business permanently and informs the Land Department about it.
The broker leaves the business for a period exceeding 12 consecutive months without a legitimate excuse acceptable to the committee.
He loses any of the conditions which should be met as per the provisions of this by-law, any regulations or instructions issued hereunder.
If it becomes clear that his registration was based on false information that he submitted to Rera.
The writer is senior legal counsel at Dubai's Land Department.
