Can Dubai property owner terminate deal with real estate agency for not fulfilling duties?

We have a unit in the Greens which we’d like to sell or rent as we are considering an overseas job opportunity. As a courtesy to the agent who originally sold us the unit, we offered the opportunity exclusively to him (under Form A). Unfortunately, we feel he is dragging his feet and not being straightforward about his intentions. When we approached him about this, he mentioned it costs over Dh1,000 to list a unit for sale so he wanted to list it as a rental first. This was against our original instructions as we want to consider both rent and sale scenarios to be able to better weigh our options. According to the estate agent, the unit is still not listed for sale anywhere to this day. Are there grounds for terminating exclusivity with a realtor? This could possibly be for not fulfilling his/her duties? Also, does the Form A automatically renew? Are there any steps I must take to cancel a Form A? When can I begin engaging new agents to show the unit? My second issue regards owning a mortgaged unit while not a UAE resident. If we take the opportunity overseas, are there any regulations/banking policies against maintaining a mortgage and renting out our unit. Would it be enough to make deposits to stay current with mortgage payments, maintenance fees, property insurance, etc.? And do you recommend hiring a third party to maintain the property? DL, Dubai

RERA has introduced a new regulation designed to guarantee the validity of properties being marketed. Real estate agencies have to apply for a permit after submitting important documents through the Trakheesi system online, via the Land Department website. These documents include a copy of the title deed of the property, the passport copy of the owner and a signed Form A. The Form A is the agreement between the owner and the agent to market the property at the agreed price. Once these documents have been received by the Land Department and approved, they then issue a permit number. This permit enables the agent to market the property online, through print media advertising, in fact any form of promotional materials and adverts.

The cost to acquire the monthly permit is Dh84 plus fees of Dh20 or Dh1,000 plus fees of Dh20 for a yearly permit.

Your agent is referring to a yearly cost but, in practice, most agents would not opt for this, preferring to hope the property will be sold or let in a much shorter time thus applying for a monthly permit.

If your property is not listed anywhere, I can only surmise that your agent has not applied for a permit yet. This, however, should not stop him from placing the property on their own website for which a permit is not required. Once all the documents have been received at the Land Department and the fees have been paid, the permit is granted. The time frame can be as quick as a few hours and is rarely any longer than 48 hours.

The terms and conditions of your appointing this agent ought to be clearly understood and checked on the Form A. The ultimate goal is to sell the property, therefore if you are not satisfied with the performance of the agent, you are entitled to cancel the Form A by giving seven days written notice of termination using another form called Form U. If the agency does not have this, a simple seven-day notification in writing, outlining the reasons for the termination should suffice.

With reference to the Form A automatically renewing or not, check the exact details on the form itself. Sometimes there are clauses that state the form will automatically renew unless terminated in advance.

Regarding the mortgage question, it is always advisable to inform your bank you are leaving the country but it is not necessary to close the account before you actually leave. If you choose not to inform them and your mortgage comes from an account your salary is paid into, the bank will notice that the regular salary is missing and start to ask questions. They will then most likely “restructure” the mortgage, which generally means increasing it slightly to a non-resident rate. If the mortgage is taken from a non-salaried account and you continue with all the necessary monthly payments, then there is no need to inform the bank.

If you are moving away, I recommend engaging a company to manage your property. You have a duty of care to your future tenant and in case of an emergency or even minor damage or breakages, you would not wish to be woken up in the middle of the night by a stressed-out tenant explaining that the water tank is leaking.

Mario Volpi is the chief sales officer for Kensington Exclusive Properties and has worked in the property industry for the past 32 years in London and Dubai. The opinions expressed in this article are those of the author and they do not reflect in any way those of the institutions to which he is affiliated. It does not constitute legal advice and is provided for information only. Please send any questions to mario.volpi@kensington.ae