RERA Dubai Real Estate Practice & Ethics 2 — Questions and Answers
Question 1: What is the maximum commission a broker is allowed to charge for a rental transaction in Dubai?
- 5% of annual rent (market convention, not a statutory maximum set by law) (Correct answer)
- 10% of annual rent mandated by RERA
- 2% of annual rent as a legal maximum
- 1 month's rent as a mandatory fixed commission
Correct answer: 5% of annual rent (market convention, not a statutory maximum set by law)
For rental transactions, the market standard commission is 5% of annual rent (or one month's rent, which is approximately 8.3% — practices vary by segment). RERA does not mandate a specific commission rate for rentals. The amount must be agreed in the Form A or Form B. Transparency is required.
Question 2: A broker receives a gift from a third party (e.g., a contractor the broker recommended to a client). What is the ethical requirement?
- Disclose the gift to the client, as undisclosed gifts from third parties create a conflict of interest (Correct answer)
- Accept gifts freely; this is normal business practice in Dubai
- Only disclose gifts worth more than AED 1,000
- Reject all gifts regardless of value as a matter of policy
Correct answer: Disclose the gift to the client, as undisclosed gifts from third parties create a conflict of interest
Undisclosed gifts, referral fees, or benefits from third parties whose services you recommend to clients create a conflict of interest and must be disclosed. Under RERA's code of conduct, brokers must act in the client's best interest without undisclosed benefit to themselves from related parties.
Question 3: Under UAE law, what is the consequence for a real estate broker convicted of fraud in a property transaction?
- Criminal prosecution with imprisonment, fines, and permanent revocation of RERA license (Correct answer)
- Only a civil fine payable to the defrauded party
- Loss of RERA license only, no criminal consequence
- A warning and mandatory ethics training course
Correct answer: Criminal prosecution with imprisonment, fines, and permanent revocation of RERA license
Real estate fraud in the UAE is treated as a serious criminal offense under the UAE Penal Code and specific real estate laws. Convicted brokers face imprisonment, financial penalties, deportation for foreign nationals, and permanent license revocation. RERA coordinates with Dubai Police on fraud cases.
Question 4: What is the broker's responsibility regarding property valuations given to clients?
- Provide honest, evidence-based market opinions; never inflate or deflate values to manipulate a transaction (Correct answer)
- Provide valuations that benefit the transaction going through
- Use only DLD valuations regardless of market evidence
- Refuse to provide any valuation opinion; refer only to official DLD valuers
Correct answer: Provide honest, evidence-based market opinions; never inflate or deflate values to manipulate a transaction
While brokers are not licensed appraisers, they provide market opinions that clients rely on. Providing inflated or deflated figures to manipulate clients into decisions they would not otherwise make is a misrepresentation and an ethical violation. Brokers should base opinions on comparable market data.
Question 5: A broker in Dubai wants to advertise a property on social media. What RERA compliance steps are required?
- Obtain an activity permit (advertising permit) via Trakheesi, include permit number, broker license number, and accurate property details in the advertisement (Correct answer)
- Simply post the property with photos and contact number
- Only include the developer's name and project name
- No specific compliance steps are needed for social media advertisements
Correct answer: Obtain an activity permit (advertising permit) via Trakheesi, include permit number, broker license number, and accurate property details in the advertisement
RERA advertising rules apply equally to all platforms including social media. Every property advertisement requires: a Trakheesi activity permit for that specific listing, inclusion of the RERA permit number, broker license number, accurate property details, and truthful pricing. Non-compliant social media ads carry the same penalties as print ads.
Question 6: What is the RERA code of conduct's position on a broker making a personal investment in a property their client is also interested in?
- Prohibited unless fully disclosed to the client, who must provide written informed consent; broker interest must not harm the client (Correct answer)
- Permitted freely as brokers can invest personally
- Only prohibited for brokers with less than 5 years experience
- Permitted if the broker offers the client a lower price
Correct answer: Prohibited unless fully disclosed to the client, who must provide written informed consent; broker interest must not harm the client
A broker investing in a property that a client is also interested in creates a direct conflict of interest. RERA's code requires full written disclosure to the client, who must give informed written consent. If the conflict cannot be managed, the broker should withdraw from representing the client in that transaction.
RERA Dubai Real Estate Practice & Ethics 2
What is the maximum commission a broker is allowed to charge for a rental transaction in Dubai?