Dubai Real Estate Practice & Ethics Flashcards

What is the maximum commission a broker is allowed to charge for a rental transaction in Dubai?

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.

A broker receives a gift from a third party (e.g., a contractor the broker recommended to a client). What is the ethical requirement?

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.

Under UAE law, what is the consequence for a real estate broker convicted of fraud in a property transaction?

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.

What is the broker's responsibility regarding property valuations given to clients?

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.

A broker in Dubai wants to advertise a property on social media. What RERA compliance steps are required?

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.

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?

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.