Regarding the Regulation of Real Estate Brokers’ Register in the Emirate of Dubai
Background
By-Law No (85) of 2006 regarding the Regulation of Real Estate Brokers
Register in the Emirate of Dubai (the “Brokers Law”) was issued by the
Chairman of the Dubai Land Department on 30th May 2006 and came into force
immediately. The By-Law was issued pursuant to Article (6) paragraph 6 and
Article (28) of Law No (7) of 2006 concerning Real Property Registration in
the Emirate of Dubai (the “Dubai Property Law”).
(Article (6) paragraph 6 of the Dubai Property Law tasked the Land Department
to “lay down the rules in connection with regulating and maintaining a register for
real estate brokers”; Article 28 of the Dubai Property Law gave the Chairman of
the Land Department the power to issue the required regulations, orders and
instructions for the enforcement of the provisions of the Dubai Property Law.)
Essential Features
The essential features of the Law may be summarised as follows:-
The Brokers Law is applicable to all real estate brokers who deal in the
sale and purchase of property that is registered at the Dubai Land
Department (“regulated brokers”).
In addition to the requirement to obtain and maintain a trade license from
the Dubai Department of Economic Development, a regulated broker is
required to apply for registration in the Brokers Register maintained by the
Dubai Land Department.
The requirement to obtain registration in the Brokers Register applies to
the company itself and to those individuals within the company who wish
to have authority to attend the Land Department to transact business. The
current registration fee is AED 5,000 per annum for companies and AED
500 per annum for individuals. These fees are currently under review and
are subject to change.
Existing Brokers have a period of six (6) months from 30th May 2006 to
obtain registration in the Brokers Register.
Certain criteria must be met as a condition of a Broker’s registration in the
Register, including the production of a certificate from an accredited
training course provider and the passing of a professional test
administered by the Land Department.
All registered Brokers are required to comply with a Code of Ethics
published by the Land Department.
A Broker must be appointed by his client in writing and the contract must
be registered at the Land Department as a precondition to the Broker
being eligible to be paid his fee. This measure is designed to prevent
several Brokers claiming a commission from a single transaction.
Breach of the Brokers Law or the Code of Ethics may result in a warning,
notice, suspension from work for a period of up to six (6) months, blacklisting
or cancellation of the Broker’s registration.
A new Council is established at the Land Department to hear disputes
related to Brokerage. This is not a mandatory form of dispute resolution
and both parties must agree for their dispute to be referred to the Council.
The Council will act as a conciliator, not an arbitrator, and neither party is
bound to accept its findings and recommendations. However, if the referral
to the Council results in a mutually agreed settlement of the dispute, such
settlement is enforceable through the Courts.
There follows an unofficial translation of the Brokers Law, together with the Code
of Ethics issued pursuant to it:
By-Law No. (85) of 2006
Regarding the Regulation of Real Estate Brokers’ Register in the Emirate of
Dubai
Chairman of the Lands & Property Department
After perusal of Law No. (7) of 2006 Regarding Real Estate Registration in
the Emirate of Dubai, and pursuant to Articles (6) paragraph (6), and (28) of
the said law and according to the proposal by the Department’s General
Director,
We issued the following By-Law:
Chapter (1)
Definitions & General Provisions
First: Definitions
Article (1)
This By-Law is called “By-Law No. (85) of 2006 Regarding the Regulation of Real
Estate Brokers’ Register in the Emirate of Dubai”.
Article (2)
The words and phrases contained in this By-Law shall have the meanings shown
against each of them unless the context requires otherwise:
Emirate: Emirate of Dubai
Department: Lands & Property Department
Director: Department’s General Director
Committee: Permanent Committee of the Real Estate Brokerage
Council: The competent Arbitration Council to settle brokerage disputes
Division: Division of the Real Estate Brokerage in the Department
Authorities: The competent licensing governmental and semi governmental
authorities
Real Property: Anything immovable fixed within its boundaries which cannot
be moved without damaging or changing its features
Register: The Electronic or Documentary Register of the Real Estate Brokers
List: The list of the certified Brokers from Class (A) prepared by the
Committee
Broker: It also means ‘bidder’, the person who carries on the Brokerage
activities as per the provisions of this By-Law
Brokerage: a contract by which a Broker undertakes to another person to look
for a second party to enter into a certain contract through mediation
in the contracting negotiations in consideration of a fee.
Person: A natural or legal person.
Second: General Provisions
Article (3)
A Person may not carry on the Brokerage activity in the Emirate unless he is
licensed by the competent authorities and registered in the Register.
Article (4)
A Register of Brokers who are licensed to carry on the Brokerage activity in the
Emirate shall be established and every change or amendment made on this
information shall be recorded therein.
Article (5)
Brokers shall be in two classes:
Class (A): The people of expertise who are registered in the List, unlicensed by
the competent authorities and certified by the Chairman as exempted
from the registration requirements.
Class (B): The people who carry on the Brokerage activity under a license
issued by the competent authorities.
Chapter (2)
Conditions of Registration in the Brokers’ Register
Article (6)
Subject to what is provided in Article (5-A) the people from Class (B) who wish to
carry on the Brokerage activity in the Emirate shall submit to the Division an
application on the prescribed form to be registered in the Register. The
application shall include the following documents:
1- A valid trade license issued by the competent authorities.
2- A membership certificate in the Dubai Chamber of Commerce & Industry.
3- A copy of the applicant’s license/applicants’ passport with regard to the
sole proprietorships or companies.
4- An exact copy of the ownership certificate of the Brokerage shop or its
lease contract.
5- A certificate of good conduct for the establishment’s owner and the senior
manager or senior managers of the company.
6- None of the company’s directors or the partners authorised to run the
company shall previously have been declared bankrupt or convicted of a
crime violating honour or trust.
7- Obtaining certificates in courses specialized in the real estate field from
educational institutions accredited by the Department.
8- Passing the Brokerage profession test prepared by the Department.
Article (7)
The Division shall examine the application. Within seven days from submitting
the application, the Division shall request the applicant in writing to complete the
documents or information it deems necessary.
Article (8)
The Division shall take all the procedures to verify that the applications for
registration, updating or cancellation meet the requirements of the By-Law
provisions and decisions issued in accordance therewith.
Article (9)
The Division shall present applications for registration to the Committee within
seven business days from the date of submitting the application or completing
the documents and information required by the Department, as the case may be.
Article (10)
The Committee shall have the right to approve an application for registration or
reject the same. The applicant shall be informed of the decision in this regard. A
decision to reject an application for registration shall be justified.
Article (11)
If the Committee rejects an application for registration, the concerned person
may resubmit his application, after providing all the required conditions, within
fourteen days of being informed of the refusal decision.
Article (12)
The Division shall issue a Broker with a card bearing his name and address, in
addition to his registration number. The Broker shall include his name and
registration number in the Register in all correspondence and reports issued by
him.
Article (13)
Every Broker registered in the Register shall apply to the Division for annual
renewal of his registration in the Register. The renewal application shall be
submitted to the Division on the prescribed form at least thirty days prior to the
expiry date of the registration certificate. The Division shall renew the Broker’s
registration in the Register after verifying compliance with the renewal conditions.
Chapter (3)
Brokers’ Obligations
Article (14)
All registered Brokers must comply with professional ethics according to the
Code of Ethics prepared by the Committee in consultation with Brokers with
expertise and opinion.
Article (15)
A Broker must record in his special register all transactions made by him and
keep the relevant documents and papers. He shall also submit an identical copy
of the same to any of the contracting parties who ask for it.
In case of selling by map or form (off- plan), he must keep the map or form until
the transaction is completed.
Article (16)
A Broker shall submit all information, data and statistics related to the Brokerage
activity which are requested by the Department.
Article (17)
A Broker must inform his client of all details of negotiations, stages of mediation
he is conducting and any information that is considered necessary to enable him
to take the decision whether to enter into an agreement with the other contracting
party. A Broker must also inform the other contracting party of all substantial
issues that are related to the subject of agreement and which are necessary in
order to avoid any doubt in the agreement.
Article (18)
A Broker shall not mediate to enter into a transaction which is in violation of the
laws and regulations applicable in the Emirate.
Article (19)
A Broker shall, even if he is only authorised by one party to the transaction, give
them a faithful offer and inform them of all the circumstances he knows. He shall
be responsible before them for any deception or mistake he makes.
Article (20)
A Broker may not establish himself as a second party in the contract in which he
mediates to sign unless the contracting party allows him to do so and in this case
the Broker shall not be entitled to a fee.
Article (21)
A Broker shall be the guardian of any monetary 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.
Article (22)
A Broker shall be responsible for any losses or damages inflicted on any of the
contracting parties as a result of his acts through deception, fraud or nonobservance
of the principles to be followed as per the provisions of this By-Law
or in accordance with the requirements of the Code of Ethics.
Article (23)
A Broker’s right to fees or claim to be reimbursed for expenses he incurs, shall
terminate if he works in favour of the other contracting party thereby violating his
obligations towards the party he is representing, or if he accepts from the other
party a promise to obtain a benefit when such promise is prohibited by the rules
of good faith and the Code of Ethics.
Article (24)
If many Brokers were authorized to work on one contract, they shall be jointly
responsible for the work delegated to them, unless they were authorised to work
severally.
Article (25)
If many persons authorise one Broker in a joint act, they shall be jointly
responsible towards him for carrying out this authorisation, unless they agree
otherwise.
Chapter (4)
Broker’s fees
Article (26)
The Brokerage contract shall be in writing and shall state the names of the
contracting parties, specifications of the Real Property and the Brokerage
conditions. The contract shall be registered in the real estate register.
Article (27)
A Broker’s fee shall be determined by agreement. If there is no agreement the
fees shall be determined according to the prevailing practice.
Article (28)
1- A Broker shall not be entitled to a fee for his Brokerage unless this
Brokerage resulted in a contract to be entered between the two parties.
The contract shall be considered as entered when the parties agree on all
the conditions provided in the brokerage agreement.
2- A Broker shall be entitled to his fee upon signing the sale contract and
registration of it in the Department, unless the brokerage agreement
stipulates otherwise.
3- If the sale contract is pending on a condition agreed on pursuant to the
Brokerage contract, the Broker shall not be entitled to his fee unless this
condition is met.
Article (29)
If the Brokerage contract is revoked, the Broker may claim his fees pursuant to
the agreement stipulated in the Brokerage contract, unless deception or grave
mistake was proved on his part.
Article (30)
If a Broker’s instructions or negotiations did not lead to signing a contract
between the two parties, the Broker shall not be entitled, in consideration of his
endeavour, to claim any compensation, expenses or costs he incurred unless the
Brokerage contract provides otherwise.
Article (31)
If more than one Broker participated in the mediation or negotiation for one party
in order to reach an agreement and this led to the completion of the agreement,
all of them will be entitled to the fees as if they were one Broker and the fee shall
be divided between them as per the conditions of the contract entered between
them.
Article (32)
Subject to Article (30), if a party contracted with many Brokers independently and
with regard to one subject in order to mediate for him and negotiate on his behalf
in an agreement and one of them succeeded in completing the transaction, he
alone shall be entitled to the full compensation.
Article (33)
A Broker shall be entitled to compensation only from the party to the transaction
who authorises him to mediate in the transaction. If the authorisation was issued
by both parties, each one shall be severally responsible towards the Broker for
paying the fee due from him, even if they agreed that one of them shall pay the
full fee to the Broker.
Chapter (5)
Settlement of Disputes
Article (34)
The Department shall have a Council composed of four persons, in addition to
the legal consultant of the Department . They shall be appointed by a decision
issued by the Director. The Council shall have competency to settle disputes
related to Brokerage.
Article (35)
The Council shall not consider disputes of real estate Brokerage unless the
Brokerage contract contains the condition for amicable dispute settlement by the
Department, or the adversaries agree subsequently to refer their dispute to the
Council for arbitration. The agreement on arbitration shall only be established in
writing and it shall specify the subject of the dispute in the dispute settlement
document.
Article (36)
The Council shall commence its duties according to simplified procedures that
seek to resolve disputes and establish justice between adversaries, by following
the general principles of the law.
The Council’s decision shall be in accordance with the rules of the law, unless
the Council was authorised to conciliate. In this case the Council shall not comply
with these rules except with the rules related to the public order.
Article (37)
The Council shall have a secretariat to be in charge of receiving applications,
opening files, writing proceedings and correspondence, serving notices upon the
adversaries, maintaining files and generally to do all the administrative tasks
assisting the Council. The secretariat shall be appointed by a decision from the
Director.
Article (38)
1- The amicable disputes settlement application shall be submitted to the
Committee by the party requesting settlement according to the form
prepared for this purpose. Supporting documents and sufficient copies
according to the number of the disputing parties shall be enclosed with the
application.
2- The chairman shall order that the application is registered after the
applicable fee is paid. The secretariat shall serve a notice upon the
adversary (the respondent) in the application.
3- The respondent shall respond in writing to the application statement and
the incidents and requests therein. He shall lodge this response and any
supporting documents thereof with the secretariat within a week from
notifying him.
4- The Council shall decide in the dispute within a maximum period of thirty
days from the date of referring the case. This period may not be extended
unless there are reasons justifying this.
Chapter (6)
Disciplinary Penalties and the Cancellation of the Brokerage Capacity
Article (39)
Without prejudice to any penalty set by the applicable laws, the Committee shall
have the right to impose any of the following penalties on a Broker who violates
any of the provisions of this By-Law, the decisions or instruction issued
thereunder:
1- Warning
2- Notice
3- Suspension from work for a period not exceeding six months.
4- Listing the Broker’s name on the black list.
Article (40)
A Broker’s registration shall be cancelled if he breaches the Code of Ethics or if
he commits a substantial violation of the applicable laws, regulations and
instructions in the Emirate, or accumulates three points in the black list, and the
cancellation shall be based on a decision issued by the Director according to a
recommendation from the Committee, stating the reasons for cancellation. The
Broker may file a grievance against the decision of cancellation with the
chairman within fifteen days of being informed of it. The decision of the chairman
shall be final.
Article (41)
The Brokerage capacity shall be lost by the Broker and his registration with the
Department shall be cancelled in the following events:
1- The Broker leaves the Brokerage business permanently and informs the
Department accordingly.
2- The Broker leaves the Brokerage business for a period exceeding twelve
consecutive months without a legitimate excuse acceptable to the
Committee.
3- He loses any of the conditions which should be met as per the provisions
of this By-Law or any decisions or instructions issued thereunder.
4- If it becomes clear that his registration was based on false information that
he submitted to the Division.
5- The chairman issues a decision cancelling the registration as per the
provisions of Article (40) of this By-Law.
Article (42)
The Division shall notify the competent authorities of the decision issued to
discontinue a Broker’s activity or cancel his registration.
Chapter (7)
Final Provisions
Article (43)
Brokers practicing when this By-Law is issued shall conform their status with its
provisions within six months from the day it was issued. The Chairman may
extend this period for a further period not exceeding three months if there are
reasons justifying this.
Article (44)
The Committee shall be entitled, through consultation with the competent
authorities, to classify the Brokers according to their area of specialisation and to
determine their number according to the need.
Article (45)
The Department shall receive fees for the services provided pursuant to this By-
Law which shall be determined by a decision issued by the Chairman.
Article (46)
The Chairman shall issue the orders, decisions and instructions necessary to
implement the provisions of this By-Law.
Article (47)
The provisions of this By-Law shall be valid from the date it is signed.
Issued by us on 30/05/2006
Mohammad Bin Khalifa Al Maktoum
Chairman of the Lands & Property Department
Dubai
Code of Ethics
Introduction
The Real Estate Brokerage profession is one of the professions that influences
real estate activity due to its role in promoting real estate investment. Therefore,
the Department is keen on organizing this profession as it issued By-Law No.
(85) for the year 2006 in relation to preserving and organizing the Real Estate
Brokers Register which includes the regularized procedural and subjective rules
for the real estate brokerage activity.
One of the most important aspects of the above mentioned By-Law is Article (14)
which stipulates that “All registered brokers must comply with professional
ethics according to the Code of Ethics prepared by the Committee in
consultation with Brokers with expertise and opinion”.
Therefore, the Code was issued to complement the Brokers’ By-Law through
associating legal rules with the rules of moral and professional conduct in the
practice of Real Estate Brokerage in the Emirate of Dubai; and its principles are
based on ethics of conducting business and transactions in the field of real estate
brokerage the foundation of which is honesty, trust, integrity, respect and similar
principles derived from the heritage and ethics of the UAE Society.
The development and improvement of the brokerage profession is a goal that the
Code seeks to achieve through the Brokers’ obligation to provide the highest
levels of professional and ethical conduct.
Sultan Bin Buti Bin Mijrin
General Manager
Lands and Properties
Department
WE, Real Estate Brokers licensed to practice in the Emirate of Dubai, hereby
undertake to adhere to the following principles and rules:
First – Fair Treatment
We undertake to treat all contracting parties equally and to achieve justice
between them without prejudice or differentiation.
Second – Respectful Treatment
We undertake to respect the contracting and concerned parties and to respect
the privacy of parties and we reject any conduct that would belittle them.
Third – Preservation of Privacy
We undertake to preserve the privacy of the parties and the confidentiality of their
information and undertake not to reveal any information which is confidential or
considered as such to any party whether such information relates to the buyer,
the seller or any parties related to real estate brokerage. We further undertake to
keep this information from reaching any party that would expose it for contractual
or personal purposes.
Fourth – Trust and Integrity
We undertake to present the deal to both parties honestly and to inform the
parties of all the facts and circumstances known to us regarding the real estate
and to conduct our business with trust and integrity without harming the
reputation of real estate brokerage.
Fifth – Quality Observation
We undertake to provide brokerage services of practical value to parties related
to the real estate brokerage activity and to continuously seek to develop such
services in terms of precision and quality.
Sixth – Observance of Regulations and Laws
We undertake to observe the regulations and laws applied in the country and to
honour our contractual obligations. We further undertake not to allow individuals
who are not brokers to operate through our office or to exploit the name or
license of our office. We realize that forgery, intentional or negligent presentation
of false information or data or any attempt to do so shall subject its perpetrators
to questioning and investigation in addition to taking necessary disciplinary action
against them.
Seventh – Integrity
We are diligent in dealing with all parties with integrity and trust and undertake
that our efforts will be based on trustworthy and clear information. We further
undertake to deal transparently with all parties concerned including transparency
of systems and procedures related to our operations.
Eighth – Obligation towards the Society
We undertake to be active members of the society and to work to respect the
values and principles of our society. We shall also strive so that our services will
support the growth of real estate development in the Emirate.
Ninth – Observance of the Interests of Contracting Party
We undertake to protect the interests of the contracting parties and to abstain
from doing anything that might harm the interest of one party.
Tenth – Obligation to Preserve Document
We undertake to preserve all documents, instruments and things related to the deal.
Eleventh – Respect of the Regulations and Procedures of the Lands and
Property Department
We undertake to respect the regulations and procedures observed by the
Department. We are further bound by the rules of good behaviour when visiting
the Department and to respect the instructions issued to us by the Department
officials. We undertake not to establish special relations with the Department
employees for personal gain.
