The moment the deal closes is not the moment you get paid
You’ve done the work. Your client signed the SPA, the unit is registered through the Oqood system, and the developer’s sales team has stamped everything. The co-broking agency on the other side of the deal is celebrating. You’re already calculating your split.
Then the wait begins.
Three weeks pass. A month. You follow up with the developer’s commission department. They say the first tranche releases after the buyer’s second instalment clears. Your co-broking counterpart starts calling you, asking when you’re going to pass their share across. You explain that you haven’t received anything yet. They don’t quite believe you. The relationship, which was cordial through the whole deal, starts to develop a cool edge.
This is not an unusual story in Dubai’s off-plan market. It plays out every week, across every brokerage that moves off-plan inventory. And the root of it sits in a piece of legislation that most agents know by name but rarely study in detail: Law No. 8 of 2007.
Understanding what that law actually does — and crucially, what it does not do for the agent — is the difference between managing your cash flow intelligently and being blindsided by a wait you didn’t plan for.
What Law No. 8 of 2007 actually does
Law No. 8 of 2007 establishes the mandatory escrow system for off-plan real estate in Dubai. It requires developers to open a dedicated, project-specific escrow account with a DLD-approved bank, deposit all buyer payments into that account, and withdraw funds only in stages linked to verified construction milestones.
This was not a bureaucratic reflex. The law was introduced after several high-profile project failures during Dubai’s pre-2009 building cycle, where developers collected buyer funds, diverted them to other projects or operating expenses, and left investors with unfinished buildings and no recourse.
The mechanics of the law are specific. Buyer instalments are paid into a project-specific escrow account held at a RERA-approved bank — the escrow agent — never into the developer’s general operating accounts. The DLD maintains both a Developers Register and an Escrow Agents Register and can audit the accounts at any time.
The developer can only draw on the escrow account in stages that correspond to construction milestones verified by an independent engineer. The sequence typically follows foundation completion, structural completion of each floor or phase, mechanical and electrical installation, finishing works, and handover. At each stage, the escrow agent requires a completion certificate from the independent engineer and RERA approval before releasing funds.
Article 14 of Law No. 8 of 2007 also requires the escrow agent to retain 5% of total project funds for one year after completion as a warranty guarantee against structural defects.
There is one more protective layer worth noting. Under Law No. 8 of 2007, all buyer payments are deposited into a dedicated DLD-registered escrow account, and these funds are protected from the developer’s creditors — even if the developer faces financial difficulties, escrowed payments cannot be seized for the developer’s other debts.
All of this protects buyers. It protects the integrity of the project. What it does not do is protect your commission, or sequence your payment in any legally defined way. The escrow law is silent on agents.
Where agent commission sits in the off-plan structure
To understand why commission payment stalls, you need to understand where it comes from in the first place.
Buyers do not pay commission on off-plan properties in Dubai, as developers usually pay the brokerage directly to market and sell the project. The commissions in this case are usually higher compared to the secondary market and can go up to 8% of the sales value.
This arrangement shapes everything. In a secondary market deal, commission flows from a client who signs a Form A or Form B with a RERA-licensed broker, and the trigger for payment is relatively clear — typically at MOU signing or at DLD transfer. Off-plan is structurally different. The developer is the paying party, and the developer sets the payment terms in the marketing or co-broking agreement they sign with the agency. There is no standard across the market. Every developer structures their commission disbursements differently.
Developers do not pay commissions at the point of sale. The standard payment schedule ties commission release to buyer payment milestones. Most developers release 50% of the commission after the buyer’s first payment clears and the remaining 50% after the second or third instalment. This creates a 30-90 day lag between the sale and full commission receipt.
For brokerages managing cash flow, this delay means maintaining working capital to cover agent payouts and operational expenses before developer payments arrive.
And then there are clawback clauses. Clawback clauses protect developers from commission fraud. If a buyer cancels within 30-60 days of booking, the developer claws back 100% of the commission paid. If cancellation occurs within 60-180 days, the clawback is typically 50-75%. After 180 days, commissions are generally non-refundable.
Clawback exposure ripples downstream. If the developer takes back commission from the listing agency after a buyer cancellation, and that listing agency has already paid a referring or co-broking agency their split, the listing agency is now chasing that money back — or absorbing the loss. That is where relationships fracture.
The co-broking layer: where most disputes start
Dubai’s off-plan market runs on shared listings, and Dubai agents know this well. There is no exclusive mandate system that hermetically seals a project to one agency. Multiple brokerages are simultaneously authorised to sell the same developer project, and when a buyer comes through an agency that is not the primary listing agency, a co-broke takes place.
Sub-agency occurs when a referring agent passes a client to a listing agent and receives a referral fee, usually 25% to 50% of the total commission. The specific mechanics of who gets paid what, and when, depend entirely on what is agreed between the two agencies — and how well that agreement is documented.
In large or complex deals, the commission split between agencies can be negotiated between brokerages before the deal closes, and agents are required under RERA rules to disclose their commission arrangement to all parties.
When multiple agents are involved in the same listing, off-plan and resale property commissions are split between them according to signed RERA forms. This ensures transparency and avoids disputes.
In practice, however, many co-broke arrangements in off-plan deals are agreed verbally or over WhatsApp, with a follow-up email that neither agency stores carefully. The split percentage is agreed in the heat of the deal. The formal documentation comes later — or not at all.
Here is the sequence that creates trouble. Agency A holds the developer authorisation. Agency B brings the buyer. They agree a 50/50 split on the commission verbally. The buyer signs the SPA. Agency A registers the transaction with the developer. The developer releases the first commission tranche to Agency A after the buyer’s second instalment — six weeks after the unit was booked. Agency A, now having received half the total commission, pays Agency B their 50% of that tranche.
But what happens when the buyer cancels before the second tranche? The developer claws back their paid portion from Agency A. Agency A has already paid Agency B. Agency A now wants that money back. Agency B says the deal was done, their work is complete, and the cancellation is not their problem. Neither agency has a signed, timestamped inter-agency agreement that covers this scenario.
This is not a hypothetical. It is a repeating pattern.
Why the escrow law accelerates the timing problem
The escrow law structures developer access to buyer money around construction milestones. That structure has a knock-on effect on commission timing that agents often don’t fully trace.
Consider a project at launch phase. The buyer pays a booking amount — say 10% — which goes into the escrow account. No construction milestone has been verified yet. The developer cannot release those funds for their own operations until the engineer certifies the first stage. Yet many developers choose to release commission at this booking stage, before the escrow-held funds are unlocked, because the marketing agreement with the agency requires it. This works while sales velocity is high and the developer has adequate operating capital outside the escrow account.
Now consider what happens when a project slows. The practical timing of a refund — or any disbursement — depends on the balance available in the escrow account, RERA’s involvement, and whether other buyers are also seeking refunds simultaneously. When a developer is under financial pressure, commission payments to agencies are often among the first obligations they delay, because unlike an Oqood-registered buyer, an agency’s claim on the developer sits outside the protected escrow structure.
Funds may only be released to the developer upon verified completion of construction milestones approved by RERA inspectors. This mechanism prevents developers from diverting buyer funds to other projects or operational expenses. What the law does not prevent is a developer deprioritising agent commission when they do receive milestone-released funds and have competing operational obligations.
This is the exposure that agents carry and that is rarely spelled out in the marketing agreement they sign at launch. The buyer’s money is protected by statute. The agent’s commission is protected only by a commercial contract — and the enforceability of that contract depends entirely on how well it was written and signed.
The Oqood registration and what it means for timing
When a buyer signs an SPA with a developer, the developer registers that SPA through the Oqood system with RERA. The developer registers the SPA with RERA through the Oqood system, and the buyer receives an Oqood certificate confirming their off-plan ownership is officially recorded with DLD. This is the buyer’s legal proof of purchase before the title deed exists.
Oqood registration is significant for agents for one reason: it confirms the deal is real, it is documented, and it is in the DLD’s system. Once Oqood is issued, a subsequent cancellation becomes more structured — it is not simply a developer or buyer walking away cleanly. The legal obligations and potential penalties are formalized.
For the agent, the Oqood registration moment is often used as the internal trigger for crediting the deal in their pipeline. But it is not a payment trigger. The commission clock still runs on the developer’s agreed schedule, tied to buyer instalment milestones, not to the DLD registration event.
In a co-broke arrangement, the agency that registered with the developer is the one that Oqood confirms as the sales broker. The second agency — the one that sourced the buyer — has no formal standing in that DLD record. Their claim rests entirely on the inter-agency agreement. If that agreement is verbal, their claim is difficult to enforce.
In order to market off-plan units through a real estate broker, developers must ensure that the project is registered with the DLD, that the broker is certified according to Dubai law, and should then register the project marketing agreement with the DLD. The marketing agreement governs the primary agency’s relationship with the developer. It does not automatically govern the relationship between the primary agency and any co-broking agency they bring into a specific deal.
That gap between the two contracts is where payment disputes live.
The VAT layer that gets forgotten in a split
Commission on property sales in Dubai is subject to VAT at 5%. This is well understood when a single agency invoices a buyer or a seller. In a co-broke, the VAT obligation can create confusion.
The developer pays the registered agency. That agency invoices the developer and accounts for VAT if they are VAT-registered. When the registered agency then passes a split to the co-broking agency, that second agency should invoice the first — and the VAT treatment applies to that inter-agency payment as well, depending on both agencies’ registration status.
When the split is agreed verbally and settled informally — as many are — the VAT accounting does not happen cleanly. Both agencies may account for the same commission transaction differently. When a dispute later arises about how much was owed and when, the invoicing trail (or absence of it) becomes critical evidence. A signed, timestamped inter-agency split agreement, produced before the developer pays out, with a proper invoice raised by the co-broker, is not administrative excess. It is how you prove your entitlement and maintain clean tax records.
What happens when a project stalls or is cancelled
Understanding the worst-case scenario helps an agent read the risk on any deal they take on.
If construction stalls or the project is cancelled, unreleased funds remain protected in the escrow account. RERA has the authority to freeze the account, halt all withdrawals, and instruct the escrow agent to refund buyers directly from the remaining balance.
Dubai law prioritises buyer refunds over other creditors when an off-plan project gets cancelled. The escrow account is legally dedicated to buyers first. Only after buyers are paid might any leftover go to other stakeholders.
Agents are not buyers and are not named in the escrow account structure. If a project is cancelled and the developer has not yet paid commission on units that were sold and then refunded, the agency’s claim is an unsecured commercial claim against the developer — the same class of creditor as a contractor who hasn’t been fully paid. If direct resolution fails, RERA provides a formal complaint mechanism for disputes involving registered agents. You can file a complaint through the Dubai REST app or directly with the Dubai Land Department. RERA has the authority to investigate complaints, mediate disputes, and take enforcement action against agents who violate regulations.
But RERA’s enforcement power over unpaid developer commissions is not the same as the statutory protection buyers have through the escrow mechanism. It is a dispute resolution process, not a guarantee.
For an agent who has already paid a co-broking agency their split on a deal where the developer has not yet fully paid out, and the project then collapses, the financial exposure is real. The co-broking agency received money that the first agency is now unlikely to recover. Without a properly written inter-agency agreement that addresses this scenario — and mirrors the clawback terms from the developer’s own marketing agreement — the loss sits with whichever agency advanced the split.
The shape of a dispute that was preventable
Commission disputes between agencies in Dubai’s off-plan market tend to follow a recognisable pattern.
Two agencies co-broke a deal. The split was agreed in conversation. One agency received the first commission tranche from the developer and paid the other their share. Then something changed — the buyer cancelled, or the developer’s second tranche arrived short, or the co-broking agency believed their split was a percentage of the total rather than a percentage of what was received at each stage. A message thread from three months ago becomes the only evidence. Neither side has a signed document.
The options at that point are: absorb the loss, negotiate a compromise, or escalate. For significant disputes involving substantial sums, you may need to pursue resolution through Dubai Courts or the DIFC Courts if your agreement specified that jurisdiction. Legal action is typically a last resort due to the time and cost involved.
The time cost alone is destructive. The relationship between the two agencies — which should be a source of future shared deals — is damaged or ended. The reputational signal in a market where co-broke relationships are currency is not small.
The first step in any dispute is attempting direct resolution with the agent and their agency management. Many misunderstandings result from poor communication rather than bad intent, and a professional agency will want to resolve legitimate concerns to protect their reputation. That framing is useful: most of these disputes are not about dishonesty. They are about undefined terms that each party interpreted in the way that benefited them, with nothing signed to settle the ambiguity.
Reading a developer’s marketing agreement before you sign
Before any agency commits to marketing an off-plan project, the marketing agreement with the developer deserves a careful read — not just for the commission rate, but for the exact conditions under which it is paid.
The questions to answer before signing:
- When does the first tranche release? Booking deposit cleared? Second instalment? First construction milestone?
- How many tranches, and what triggers each one? Is it buyer payments, or construction progress, or a hybrid?
- What are the clawback terms? At what point does a buyer cancellation stop affecting your commission, and what percentage is recoverable at each stage?
- What is the process for registering a co-broke? Does the developer pay the listing agency in full and leave inter-agency splits to be managed commercially, or does the developer pay each agency directly?
- Is there a deadline by which a buyer introduction must be registered to qualify the co-broking agency?
These are not unusual questions to ask a developer’s sales director. A developer who has a professional marketing programme will have clear answers. If the answers are vague, that is information.
The clawback terms in particular need to flow through to any co-broking arrangement the agency enters. Every contract must clearly state the rate and payment terms upfront. If several agents share work on one property, the total commission is split between them according to agreed roles from the start. Clear terms prevent disputes. This is not idealistic advice — it is a direct description of what separates agencies that lose money on deal collapses from agencies that don’t.
The principle that removes the friction
There is a version of every shared deal that runs cleanly. The listing agency and the co-broking agency agree their split in writing before the client pays — percentage, tranche structure, clawback handling, invoicing process, all of it. Both agencies sign. When the developer releases commission, the paying-out of each party happens simultaneously, with no tranche sitting in one agency’s hands as a liability to the other.
That sequence — agree, sign, split simultaneously — is not operationally complex. It requires discipline before the deal closes, when both agencies are motivated and the conversation is easy. It is nearly impossible to agree fairly after a dispute has started, when the money has already moved and each side has a different memory of what was promised.
Commission rates must always be stated in the official RERA forms and invoices issued by licensed agencies. That principle applies with equal force to inter-agency arrangements. The document that describes what each party is owed, signed by both parties before the client signs anything, is what transforms a gentleman’s agreement into an enforceable commercial arrangement.
The escrow law has built an excellent system for protecting buyers in off-plan transactions. It gives the market a degree of trust that allows it to function at scale. What it has not done — and was not designed to do — is protect agents from each other. That is a problem the agent community has to solve through its own commercial discipline.
The off-plan market in Dubai is not slowing. In 2024 alone, off-plan sales accounted for 63% of total residential transactions, underlining the sector’s significance. More volume means more co-broke opportunities, more developer marketing agreements, and more commission in circulation. It also means more opportunities for the disputes that come from split terms that were never properly agreed.
Every deal that closes with a signed, upfront, mutual split agreement is a deal where the payment discussion is over before the commission even arrives. Every deal that closes on a handshake leaves one agency waiting on the other, and both agencies exposed to the gap between what they each remember agreeing. The former is how professionals get paid. The latter is how relationships and cash flow get damaged, one delayed tranche at a time.
The mechanics of the escrow law dictate when developers access their money. What happens from that moment forward — who gets paid, how much, and when — is entirely determined by the paper trail agents create, or fail to create, before the buyer walks into the developer’s sales office.
