Broker Liability in Dubai: When an Agent Can Be Sued

A buyer asks whether the service charge is going up. The agent repeats what the seller told him, the deal closes and two years later his name appears in the buyer's claim.

Broker liability in Dubai is narrower than most agents fear and wider than most of them check. It sits in Bylaw No. 85 of 2006 Regulating the Real Estate Brokers Register in the Emirate of Dubai and in the harmful act provisions of the Civil Transactions Law. The two run on separate tracks and produce different consequences.

The Duty Does Not Stop at Your Own Client

Article 17 of the Bylaw requires a broker to disclose the details of the negotiation and the stages of the process to his client and to disclose the material facts about the subject matter to the other party. Article 19 goes further. Even where the broker represents one party only he must faithfully disclose the transaction details he knows and he is responsible for any fraud or mistake he commits. Article 18 prohibits him from facilitating a transaction that breaches the laws or regulations in force in the Emirate.

Acting for the seller is therefore no answer to a buyer who complains about something the agent knew and did not mention. Article 19 also covers mistake, so dishonesty is not the only route in. It does not make an agent answerable for every figure a seller hands him. What matters is whether he passed the information on as the seller's statement or as checked fact and whether the loss came from it.

The Provision Behind Most Broker Liability in Dubai

Article 22 is the one to read. A broker is responsible for the losses suffered by either of the contracting parties through his deception or fraud or through his failure to observe the principles of the Bylaw or the code of professional ethics. That third limb is the one agents miss. Breaching the Bylaw can open a damages claim where the breach caused the loss, which brings practising without registration under Article 3 into the same frame as dishonesty. The two halves stay apart. Advertising without a permit is a regulatory violation in itself. It becomes a civil claim only where someone lost money because of it.

Article 21 sits beside it. A broker is a trustee of money, securities, bonds or other items delivered to him for safekeeping or for transfer, he must deliver them as agreed and he is bound by the rules of trusteeship. The provision does not itself prescribe joint signatures or a court order for a deposit cheque. It binds the broker to deal with the money as agreed, so where the Form F or the deposit terms require both parties, a broker who banks or releases the cheque without them is answering under Article 21.

A Complaint to the Regulator Is Not a Claim for Money

Chapter Six of the Bylaw sets out what the regulator can do. Under Article 39 the Committee may impose a notice, a warning, suspension for a period not exceeding six months or blacklisting. Article 40 provides for cancellation of the registration, including where the broker accumulates three black points.

None of those outcomes puts money in the hand of the person who complained. Compensation is a separate claim. The Department's own Real Estate Brokerage Practice Guide describes the route for a Form F dispute: an application through Trakheesi, a settlement meeting convened by the Department and a referral to the judicial authorities where that fails.

Most Claims Against a Broker Are Not Contract Claims

The broker's own agreement is the Form A or the Form B he signed with his client. A person on the other side of the transaction has no brokerage agreement with him and no contract to sue on. That claim arrives as a harmful act claim instead.

Article 246 of the Civil Transactions Law provides that every act causing harm to another obliges the person who committed it to compensate for the damage. Article 247 adds that where one person deceives another they are jointly liable for the harm resulting from the deception. Where several people are responsible for the same harm, Article 253 makes each liable in proportion to his share, leaving the court free to order equal shares or joint and several liability. That is how an agent is named alongside a seller rather than instead of him.

Article 170 defines deception as misleading the other contracting party by fraudulent means and Article 171 treats deliberate silence about a fact as deception where it is proven that the party would not have contracted had he known of it. Article 176 reaches past the agent, since the deceived party may seek annulment of the contract where the deception came from a third party and the other contracting party knew of it.

Three further provisions shape the outcome. Article 257 makes void any condition exempting or limiting liability for a harmful act, so disclaimer wording in a listing or an addendum does not remove the exposure. Article 253 also allows the court to reduce the compensation or refuse it where the injured party contributed to the harm. Article 258 bars the claim three years after the injured party knew of both the damage and the person responsible and in all cases fifteen years after the act.

Those numbers come from Federal Decree-Law No. 25 of 2025, in force since 1 June 2026, which repealed Federal Law No. 5 of 1985. Article 4 provides that the law does not apply retroactively to preceding facts and acts, so conduct before that date is assessed under the old code and its different numbering. Limitation is the exception. Articles 6 and 7 apply the new periods to time that had not run out by 1 June 2026, while the old rules still govern how a period started or was interrupted before then.

The Brokerage Answers Before the Agent Does

Article 266 makes a principal liable for the harm resulting from a harmful act committed by his subordinate in the performance of his duties or because of them. Subordination exists wherever the principal holds actual authority to supervise and direct. A claimant therefore names the brokerage, which holds the licence.

Article 267 is the part agents miss. The person held liable has a right of recourse against the one who actually caused the harm, so a firm absorbing the claim at the front end is not where it ends.

A File That Turns on the Records

An agent markets an off-plan unit and tells the buyer that handover is about eighteen months away, repeating the launch material. Handover runs to three years. The buyer claims against the developer and adds the brokerage. The agent remembers calling it an estimate. Nobody wrote the conversation down.

Article 15 decides more of that file than the recollection. It requires a broker to record his transactions in a private register, to keep the documents related to them and to provide copies to the contracting parties on request. For an off-plan sale he must also keep the plan or the model until the transaction is concluded. A broker who has complied holds his own defence.

When a matter of this kind reaches me as a Legal Consultant, the assessment starts with five things:

1. The Form A or Form B and what it records about which party the broker was acting for
2. The permit number the unit was advertised under and the wording of the advertisement
3. Every written representation about price, rent, service charges, handover or approvals, with dates
4. Whether the statement originated with the broker or was passed on to him, together with whatever he held in writing before repeating it
5. Where any money was held, by whom and on whose written instruction it moved

Most agents picture liability as a question of honesty. Article 19 covers mistake as well as fraud and Article 22 adds a failure to observe the Bylaw. The exposure usually begins with a sentence said quickly in a car between viewings.

The practice area page sets out how broker disputes in Dubai are assessed.