UAE Real Estate Broker Penalized for Operating Without a License
A real estate broker penalized in the UAE for lacking a license has garnered significant national attention after an Abu Dhabi court mandated him to return AED 100,000 earned through illegal means. This incident underscores the severe legal repercussions for those engaging in the UAE property market without the necessary authorization.
UAE Court Ruling on Unauthorized Real Estate Brokerage
The Abu Dhabi Commercial Court (First Instance) determined that the broker is required to refund the AED 100,000 commission he acquired from facilitating the sale of an industrial plot. The court ruled that, without a valid license to perform real estate brokerage in the UAE, the broker’s actions—and any profits derived from them—are illegal under Article 5 of the Abu Dhabi Real Estate Sector Regulation Law.
The ruling highlighted that all individuals acting as real estate agents, developers, or auctioneers must possess a valid license from the appropriate authority. Noncompliance results in forfeiture of any rights to claim commissions, profits, or rewards.
Case Overview: Illegal Brokerage and Court Response
During trial proceedings, the broker attempted to provide evidence of the sale and noted that the investor had later resold the property for AED 6.8 million. However, the court dismissed this defense, reiterating that valid licensing is mandatory for any brokerage activities in the UAE, irrespective of the success of the transaction.
Legal Consequences for Real Estate Practitioners
This ruling serves as a critical reminder for all real estate professionals in the UAE:
engaging in any brokerage operations without a government-issued license is illegal and carries penalties.
Working as an unlicensed real estate broker can lead to:
- Loss of commissions and profits
- Mandatory refunds for previously collected fees
- Legal penalties and court expenses
- Reputational harm and ineligibility for future licensing
Court Decision and Final Ruling
The court rejected the broker’s claims, ruling in favor of the investor. The broker is obligated to return AED 100,000 with interest from the date of the counterclaim until full repayment, along with all legal and court fees.
The court explicitly stated: unlicensed brokers in the UAE hold no legal entitlement to any commission, even following a successful transaction.
Conclusion
The case of a real estate broker penalized in the UAE for lacking a license serves as a strong caution for those considering unlicensed property dealings. The UAE’s real estate regulations are stringent and aimed at protecting investors while preserving market integrity.
If you intend to operate in the UAE property market, ensure your brokerage license is valid and sanctioned by the Department of Municipalities and Transport (DMT) or RERA prior to engaging in any transactions.
