Can broker charge for properties viewing?

 

Can broker charge for properties viewing?

Abu Dhabi - All contracts between client and real estate broker are approved by the department of municipal affairs.

By Ashish Mehta

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Published: Sun 15 Apr 2018, 1:30 PM

Last updated: Thu 19 Apr 2018, 9:24 AM

I am interested in purchasing a property in Abu Dhabi. My property agent wants me to sign a letter of undertaking (LoU) before he arranges the viewing of properties. One of the clause in the LOU prevents me from approaching other real estate agents for the same property arranged by this agent. It states: "Should you subsequently purchase any property as a result of these introductions, ABC PROPERTY will be eligible for the agency fee of 2 per cent of the purchase price as set out in this agreement. For the avoidance of doubt this fee will remain due should you subsequently decide to correspond directly with the landlord or any other property company in relation to the same property, after an initial introduction facilitated by ABC PROPERTY." Is this legal?
A broker is eligible for brokerage only once is completes all his work in accordance with Article 7(6) of Law No. 3 of 2015 Concerning the Regulation of the Real Estate Sector in the Emirate of Abu Dhabi, which states:
"The broker shall not be entitled to any remuneration or commission for his broker service unless such service led to the conclusion of a contract between the parties. The contract shall be considered as having been concluded when both parties agree on all the substantive issues in the contract. The broker shall be entitled to his remuneration once the contract is concluded, even if it was not executed, unless otherwise agreed."
Further, all contracts between client and real estate broker are approved by the department of municipal affairs, Abu Dhabi. Therefore it is recommended that you approach them and verify the contents of the LOU. Article 7(1) of Law No. 3 of 2015 Concerning the Regulation of the Real Estate Sector in the Emirate of Abu Dhabi, states: "The broker shall commit to conclude a written brokerage contract on the form approved by the department before carrying out any work for the party with whom the contract is concluded, and shall submit such contract to the Department in order to register it in the real estate development register before receiving any amounts from the client, and within a maximum of (15) fifteen days from the date of signing the said contract."
 


(Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom, Singapore and India. Full details of his firm on: www.amalawyers.com. Readers may e-mail their questions to: news@khaleejtimes.com or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.)



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