Broker Commission Disputes in Dubai: Two Brokers, One Deal

The transfer completes and two brokerages issue an invoice for the same commission. The seller pays one of them, usually the one who held the listing. The other is told to take it up with the firm that got paid. By that stage the buyer has moved in and nobody has any leverage left.

Commission disputes between brokers in Dubai are a different problem to a broker chasing an unpaid client. The client is out of the picture. The money has already left. The argument is about who was entitled to receive it. Bylaw No. 85 of 2006 Regulating the Real Estate Brokers Register in the Emirate of Dubai deals with this directly. It does so in a way that catches a lot of agents out.

Two Different Arguments That Look the Same

Almost every broker-to-broker file is one of two things.

The first is a split dispute. Both firms accepted they were working together. They disagree about the share, about whether the arrangement covered this particular buyer or about whether it survived a deal that closed three months later than planned.

The second is a competing claim. Neither firm ever agreed to co-broke. Both say they produced the buyer. Both invoice the full fee.

These sit under different provisions and they resolve in opposite directions, so the first question in any of these matters is which of the two you actually have.

Where Both Brokers Acted Together

Article 31 of Bylaw No. 85 of 2006 covers several brokers acting for one party in the same negotiation. Where the contract is concluded, they are treated as a single broker and the fee is divided between them according to the terms of the agreement they concluded.

Read that last part slowly. The division follows their agreement. The Bylaw does not supply a default share, so where the brokers never agreed a split in any recorded form, the provision has nothing to operate on. Article 27 then leaves remuneration to be fixed by agreement or, failing that, according to prevailing practice, which means an unwritten arrangement turns into an argument about market custom rather than an argument about contract. Fifty fifty is what the market does. It is not what the Bylaw says.

Article 24 adds a consequence brokers rarely think about. Where several brokers are engaged to carry out one contract they are jointly liable, unless they are authorised to work severally. Co-broking shares the exposure as well as the fee.

Where Each Broker Was Appointed Separately

Article 32 deals with the second situation and it is blunt. Where one party appoints several brokers severally for the same matter and only one of them succeeds in concluding the transaction, that broker takes the entire remuneration.

There is no share for effort. A firm that found the buyer, ran four viewings and negotiated the price has no statutory claim on the fee if a different firm closed the deal. The introduction is not the trigger. Conclusion is.

This is the provision that produces the angriest calls, because the broker who lost the deal genuinely did the work. The answer is that the Bylaw protects the outcome rather than the effort. The only way to protect the effort is to have documented the arrangement before the buyer was introduced.

Form I Supplies What Article 31 Assumes

Form I is the broker-to-broker agreement used when two brokerages co-broke a transaction. Its function is to record who introduced whom, which side each firm represents and how the commission is divided. In Article 31 terms, it is the agreement whose terms decide the split.

A Form I that actually protects both firms deals with more than the percentage. It identifies the property and the listing permit, names both brokerage offices, states which party each firm acts for, sets the share, says when the share becomes payable and says what happens if the deal closes outside the expected timeline or with a buyer connected to the one introduced. That last point is where most of the later disputes live.

The timing matters as much as the content. A Form I signed before the introduction is a commercial agreement. A Form I proposed after the offer has been accepted is a negotiation between two firms who now have very different amounts of leverage.

When the Agent Moves Firms in the Middle of a Deal

An agent introduces a buyer. Part way through the deal he resigns and joins another brokerage. He continues working the same buyer and expects the commission to follow him.

The contractual position usually points elsewhere. Form A, Form B and Form I are signed by brokerage offices. The party entitled to be paid is the firm named on the form rather than the individual who did the work. Article 3 of the Bylaw reinforces the point from the regulatory side, since brokerage activity may only be conducted by those licensed and entered in the Register, which is why commission is invoiced by a registered brokerage rather than by a person.

Whatever the agent is owed by his former firm is a separate question between him and that firm. It is not a defence available to the client. It does not move the entitlement from one brokerage to another.

A File That Turns on a Screenshot

A brokerage holds a listing on a Marina apartment under Form A. A second brokerage brings a buyer. The two agents agree fifty fifty in a WhatsApp exchange and no Form I is signed. Form F is signed, the transfer completes and the seller pays the listing firm the full commission. When the second firm invoices its half, the listing firm produces a portal enquiry showing the same buyer had contacted it directly two months earlier.

Now there are two competing accounts of who introduced the buyer, one WhatsApp exchange that may or may not amount to an agreement and a portal record with a date on it. When a matter of this kind reaches me as a Legal Consultant, the assessment turns on a short list of documents:

1. Whether a Form I exists, plus what it says about the share and the trigger for payment
2. The dated record of the introduction: portal enquiry logs, the first message, the first viewing confirmation
3. Which brokerage office is named on Form A and on any Form B
4. Whether the buyer signed anything with either firm
5. Whether the seller was told that two brokerages were involved
6. What was invoiced, when it was invoiced and what the payment record shows

Brokers in Dubai are careful about the client contract and casual about the one with each other. The client relationship is documented on a RERA form and the co-broking arrangement is agreed in a voice note. Article 31 hands the split to whatever the two firms agreed. Where nothing was agreed in a form anyone can produce, that provision has nothing to work with.

There is a fuller overview of broker disputes in Dubai on the practice area page.