Agency Commission in Dubai: Who Actually Owes the 2%, and When It Becomes Payable

Almost everything written about Dubai agency commission starts with the sentence "RERA mandates 2%". No instrument in Dubai real estate law says that. The 2% is a market convention, and conventions are negotiable.

What is not negotiable is the framework underneath it: Bylaw No. 85 of 2006 regulating the Real Estate Brokers Register in the Emirate of Dubai, issued by the Chairman of the Land Department on 30 May 2006. It is a short instrument and it answers the two questions that actually generate arguments — when the fee is earned, and who has to pay it.

Both answers are more specific than the market behaves as though they are.

The Rate Is Agreement, Not Regulation

Article 27 is one sentence: a broker's fee is determined by agreement, and where there is no agreement it is determined according to the prevailing practice.

That single provision does two things. It removes any statutory rate, and it makes the market convention legally relevant as a fallback. If you never agree a number and a deal completes through a broker you appointed, you are not fee-free — you are exposed to whatever the prevailing practice is held to be, which in Dubai sales is 2%.

The practical conclusion is the opposite of what most sellers assume. The 2% is not fixed by anyone, so agree it expressly and in writing, because the only thing worse than paying 2% is arguing about it after the transfer.

Here is what the prevailing practice actually looks like in 2026.

The 5% VAT on the commission is not optional and not a markup. Brokerage is a supply of services, standard-rated, and a registered agency has to charge it.

The Agreement Has to Be in Writing

Article 26 requires the brokerage agreement to be in writing, to state the names of the contracting parties, the specifications of the property and the brokerage conditions, and to be registered in the real estate register.

In practice that is done through the Land Department's own smart contracts. Its 2024 Real Estate Brokerage Practice Guide names three and requires brokers to use the electronic versions:

• Contract A — the agreement to market a property, between the seller and the brokerage.
• Contract B — the agreement of desire to purchase, between the buyer and the broker.
• Contract F — the agreement to sell, between the seller and the buyer.

The commission sits in A or B, depending on who appointed whom, and the agreed allocation between buyer and seller usually ends up recorded in the F as well. Agency-to-agency splits are handled by a separate collaboration form, which is market practice between brokerages rather than something the Land Department's own practice guide sets out.

One caution about registration. Dubai courts have not been consistent on whether failure to register a brokerage agreement defeats a fee claim — some decisions have treated registration as an administrative requirement, others have dismissed claims that could not evidence it. From either side of the table the lesson is the same: an unregistered form is a weak document, so do not rely on one.

When the Fee Is Earned

This is where most disputes actually live, and the bylaw is unusually clear.

Article 28. A broker is entitled to remuneration only where a contract is concluded between the parties. In practice entitlement arises on signature of the sale contract and its registration at the Land Department, unless the brokerage agreement says otherwise. Where the contract depends on a condition that is never satisfied, the entitlement does not arise.

Article 30. If the broker's efforts do not produce a concluded contract, the broker cannot claim remuneration or even the expenses incurred, unless the brokerage agreement expressly provides for it.

Read together, those two articles dispose of the most common claim in the market. Viewings are not a fee. Introductions are not a fee. Marketing spend is not a fee. A concluded contract is the fee, and nothing short of it is, unless you signed something that says so — which is exactly why you read Form A before signing it rather than after.

Article 29 covers the other direction. If the contract is revoked, the broker may still claim the fee in accordance with the agreement, unless deception or serious error on the broker's part is proven. A deal that falls apart after signing is not automatically a free deal.

Who Is Liable: the Article That Ends the Argument

Article 33 is the provision almost nobody quotes and the one that decides real disputes. The party who appointed the broker owes the fee. Where the broker was appointed by both parties, each party is severally liable for its own share even if they agreed between themselves that one of them would bear the whole fee.

Sit with that for a moment, because it inverts a very common arrangement.

A buyer signs Form B with an agency. During the negotiation the parties agree that the seller will settle the commission. The seller then does not pay. Under Article 33 the agency can look to the buyer for the buyer's share regardless of that agreement, because the private allocation between buyer and seller does not displace the appointment.

The fix is not complicated, and it is almost never done:

• Keep the appointment consistent with the intended payer. If the seller is paying, the seller appoints. Signing a buyer-side form and then agreeing the other side pays creates exactly the gap Article 33 fills.
• Record the allocation in the Form F as well, so the agreement between buyer and seller is documented and enforceable between them.
• Get the agency to confirm in writing that it will look only to the paying party. That is a contractual waiver and the bylaw does not stop the agency giving one — it just does not give you one by default.

Two Agencies, One Deal

Sellers worry that marketing with several agencies multiplies the commission. It does not.

Article 31. Where several brokers have mediated together on the same transaction for the same party, they are treated as a single broker and share the fee between them according to their own agreement.

Article 32. Where a party has appointed several brokers independently on the same subject, the broker who concludes the transaction is entitled to the full fee alone. The others get nothing.

So four agencies advertising your apartment is a marketing and pricing problem, not a commission problem — the bill is one fee, paid to whoever closes. What multiple-agency marketing does cost you is price discipline, because four agencies advertising four different numbers tells every buyer that your asking price is a suggestion.

When a Broker Loses the Fee Entirely

The bylaw also sets out how an agency forfeits its entitlement, which matters if you are on the receiving end of poor conduct.

Article 19. A broker represents one of the parties to the transaction and must faithfully disclose the details and conditions of the transaction that are known to them.

Article 20. A broker may not present themselves as a party to the transaction without express authority, and loses the right to remuneration if they do.

Article 23. A broker forfeits remuneration where they breach their obligations to their client by favouring the opposing party, or by accepting a benefit inconsistent with professional ethics.

Article 21. A broker is deemed the trustee of any sums, securities or documents handed to them, with strict delivery obligations attached.

Article 22. A broker is liable for losses caused by fraud, deception or breach of the rules.

Underneath all of that sits Article 3: practising as a broker in Dubai requires a brokerage trade licence from the Department of Economy and Tourism and registration in the brokers register maintained by the Real Estate Regulatory Agency. Someone who is not registered has a licensing problem of their own, and a fee claim that starts from a weak position.

What Is Actually Negotiable

Given Article 27 makes the rate a matter of agreement, here is what moves in practice.

• The rate on larger tickets. Above roughly AED 10 million, 2% stops being automatic. 1% to 1.5% is commonly agreed, and on very large transactions a fixed fee is not unusual.
• The dual-side position. Where one agency acts on both sides, paying two full 2% fees for one piece of work is a choice, not an obligation.
• The trigger. The default under Article 28 is a concluded and registered contract. Agree expressly whether the fee is due at Form F signature, at transfer, or on receipt of funds, because "unless the brokerage agreement says otherwise" is an invitation to write it down.
• The base. 2% of the headline price and 2% of the price net of an agreed discount are different numbers. Say which.
• The exclusivity period on Form A, and what happens if a buyer the agency introduced returns after the mandate expires. Dubai has no standard protection or tail period, so if you want one, or want to exclude one, it has to be in the form.

The Short Version

Dubai agency commission is governed by Bylaw No. 85 of 2006, not by a published rate. Article 27 makes the fee a matter of agreement with prevailing practice as the fallback, which is why the market's 2% plus 5% VAT on sales and 5% of annual rent on residential leases is relevant but not binding. Article 26 requires a written brokerage agreement naming the parties and the property and registered in the real estate register, delivered in practice through the Land Department's Contract A for a seller mandate, Contract B for a buyer mandate and Contract F for the sale itself. Article 28 earns the fee only on a concluded contract, in practice at signature and registration, and Article 30 means that without a concluded contract there is no claim even for expenses unless the agreement says so. Article 29 preserves the fee where a signed contract is later revoked, absent deception or serious error. Article 33 holds the appointing party liable, and where both parties appointed the same broker each remains severally liable for its own share even after agreeing that one of them would pay everything. Articles 31 and 32 mean multiple agencies share one fee or, where appointed independently, the closer takes it all. Articles 19 to 23 forfeit the fee for misrepresentation, unauthorised self-dealing or favouring the other side. Agree the number, the trigger and the payer in writing before the viewings start.

This is general information about Dubai brokerage practice, not legal advice. Bylaw provisions are summarised rather than reproduced, court treatment of registration has not been uniform, and market commission conventions change. Take independent advice on a specific dispute and read any brokerage form in full before signing it.