Neighbourhood Watch: Agents should act for the tenant not the landlord

I have been writing this column for over five years, and I believe it might be interesting to revisit certain issues with respect to how they have or have not changed.

I would like to once again confirm the role of a real estate agent in the UAE. No matter what may be the perception or what one might believe, the agent acts for the tenant.

There is no doubt that some agents concurrently act for landlords as property managers, but in that capacity they are clearly wearing another hat. There are also circumstances where agents may enjoy a friendly relationship with certain landlords, but it is upon the building of good relationships that the best properties become available to those agents for the benefit of prospective tenants.

Many tenants suggest that they should not have to pay commission and the agents should look instead to the landlords for their fees, as they are required to do in other countries. The long and short of it is that in the UAE, the custom prevails that the tenant pays the commission.

There are many practices here in the UAE that differ from other countries and they are not going to be easily changed, nor should they. Many differences can be positive, and if one thinks about it, so is the practice of the tenant paying the fees. If this is not readily understood, consider the following.

Obligations

Should, for any reason, a law be introduced whereby the commissions are to be paid by the landlord, one can be sure that any obligations will be added to and included in the rent. But the agent is only entitled to commission on the first year's rent. Does anyone really believe that the subsequent years' rent will be reduced accordingly? There is no question that the ultimate benefit accrues to the tenant as he would otherwise be paying the commission each year.

An agent engaged by a person to source a property accepts such a mandate with a degree of risk. Initially, he must acquaint himself with the market and the properties available therein.

Commission

He must secure the right to introduce and show properties to prospective tenants either exclusively or otherwise. He must advertise himself in newspapers and other media to attract clients and he must make himself available to show properties at his clients' convenience. All of which he does willingly and without complaint and at no charge unless he is successful in renting a property. Accordingly, he is entitled, by custom in the profession, to a commission payable by the tenant upon the signing of the lease.

Often a client may not sign up for a property shown by an agent who has otherwise been most helpful. This is the way things work out sometimes. The agent who is the most helpful might not have the ideal property available for a particular taste or set of circumstances.

This is a normal and acceptable risk. The more cynical might say that agents only respond to potential commissions and their own interests. It would be difficult to dispute the fact that in a certain percentage of cases, there is at least some degree of truth to this comment. However, such behaviour is to be expected as part of life and the varying ethical standards of individuals.
In conclusion, it is in the interest of any agent to provide the best possible service regardless of who is paying the commission.

The writer is the UAE-based managing director of Better Homes LLC.