I am a US expat currently living with my family in a Jumeirah 3 villa, but we are planning to move to a villa in Barsha 1 at the end of June to be closer to the kids’ school. After an extensive (unsuccessful) search of properties listed in the area with a few agents, I found an interesting compound on my own with a “To Let” sign that was not listed on any of the usual property sites. I called the number on the sign, which was for the company that owned the compound. The company owns a number of building and properties. They gave me the watchman’s number with whom I set up a viewing of the villa. I liked what I saw, called the owner’s company back and set up a time for the following day to visit their office and sign the rental cheques and the lease.
At the meeting, everything was going along swimmingly: proper office, competent and nice staff and every indication that it is a landlord that cares about its properties and clients. But after signing the lease and while signing the cheque for the third quarter, the manager slipped in the request for an additional cheque for a 5 per cent fee. I questioned this, saying that I hadn't gone through a broker or even had anyone from his office show me the property, that he hadn't mentioned such a fee before this moment. I am currently renting from a company, which doesn't charge a signing fee in direct-from-owner transactions and this appeared to be exactly the same circumstance.
The manager gave an uncomfortable half-smile, a head nod, and said it was a management fee. A bit of an uncomfortable moment, since I had already signed the lease and didn’t want to go through another villa hunt.
Since I only had five cheques with me (four for the lease and one for the deposit), I was able to postpone the conversation and the extra 5 per cent fee for the moment. But my question to you is whether this apparently random fee is proper, acceptable, and, most importantly, legal as per rules from the Real Estate Reglulatory Agency (Rera). I feel as if they are taking advantage of me and I want to be sure I have a good understanding of the playing rules. Does it matter that the lease was signed before asking for this fee – even if was only five minutes prior? Is it something best to refuse ... or negotiate ... or simply pay? It's a Dh9,000 fee for an Dh180,000 three-bedroom villa. JV, Dubai
What you have experienced is actually not that uncommon. Even we, as estate agents, get calls from owners requesting we market their properties and after a suitable tenant is found by us, the landlord informs us that they have a real estate licence and then go on to request we share our commission fee with them.
I agree that the timing of informing you of this commission fee could have been better, but nonetheless this “charge” is up to you to decide if it is worth challenging. As per Rera, only registered agents are allowed to charge commission for a real estate transaction but often the route for justification of the same can be long and sometimes not worth fighting over. You can stand on your principles and refuse to pay, but you also run the risk of perhaps losing the villa so I would negotiate at this point to agree better or reduced terms.
Mario Volpi is the chief sales officer for Kensington Exclusive Properties and has worked in the property industry for over 30 years in London and Dubai. The opinions expressed do not constitute legal advice and is provided for information only. Please send any questions to mario.volpi@kensington.ae
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