The Question Buyers Ask That Most Agents Answer Too Quickly
Picture the scene. You have a buyer — European passport, cash ready, motivated. They saw a listing in a project near Sheikh Zayed Road. They ask, “Can I own this properly?” You say yes. Three weeks later, at the trustee office, the title deed comes out as a leasehold interest registered for 99 years. The buyer is not happy. Your co-broker blames you. The commission cheque is frozen in a dispute that never needed to exist.
Buyers sometimes find out only at the transfer stage that a building sits on leasehold land rather than freehold. That is a bad moment to discover it — the right moment is before the reservation deposit is paid, not after. For agents, the problem runs deeper than client disappointment. The ownership type of a property shapes the entire transaction: which buyers can legally hold the title, what documents are needed to transfer it, how the NOC process works, whether the deal can reach the DLD counter at all, and — most critically for anyone who relies on commission to pay the rent — exactly when and how that commission gets paid and to whom.
This article works through all of it. Not as a primer for beginners, but as a sharp tool for working agents who want to avoid the friction that costs them time and money on shared deals.
What the Law Actually Says, and Why It Still Trips Agents Up
Under Dubai’s regulatory framework, specific freehold areas allow non-UAE nationals to hold full freehold title, while other zones permit only usufruct and leasehold rights for up to 99 years. The list of designated freehold communities has grown steadily since the foundational legislation was enacted and now covers dozens of established communities, including Dubai Marina, Downtown Dubai, Business Bay, Palm Jumeirah, Jumeirah Lakes Towers, and Arabian Ranches.
In January 2025, the Dubai Land Department approved 457 plots along Sheikh Zayed Road and in Al Jaddaf for leasehold-to-freehold conversion. The conversion carries a fee of 30% of the property’s market value based on gross floor area, payable to the Dubai Land Department. That expansion is exactly why agents cannot rely on memory. Areas that were leasehold when you first started working in Dubai may now be partially freehold — and vice versa, some buildings inside newer master developments still sit on leasehold titles even when the broader district is technically designated freehold. The map is not static.
In freehold areas, a foreign buyer can own a property outright, with a Title Deed issued and registered by the Dubai Land Department in their own name. Full ownership means no local sponsor, no expiry date on the title, and the right to sell, lease, or pass the property on exactly as an Emirati owner could.
In leasehold areas, a foreign buyer purchases the right to use a property for a fixed term, usually up to 99 years, rather than owning the land underneath it. The practical implications of that single sentence ripple through everything that follows in a transaction.
How Ownership Type Changes the Buyer Pool — and Your Listing Conversation
The moment you take on a listing, the ownership type determines who you are genuinely pitching to. A freehold unit in a designated zone is available to any buyer regardless of nationality. Today, foreigners regardless of nationality or residency status can purchase freehold property in any of Dubai’s designated freehold areas. That is a wide net. You can co-broke with any Trakheesi-registered agency and refer the listing confidently across every buyer segment.
A leasehold unit is a different conversation — not impossible to sell, but requiring precision. The buyer acquires a time-limited right, not permanent title. Freehold zones allow foreigners to hold property indefinitely, while leasehold rights extend up to 99 years. That distinction matters enormously to investors focused on resale value, inheritance, or Golden Visa eligibility.
Properties valued at AED 2 million or above, whether freehold or recently converted to freehold, qualify the owner for the 10-year UAE Golden Visa. The word “freehold” in that sentence is not coincidental. An investor buying a leasehold interest — even at the AED 2 million threshold — faces a different path to residency qualification, and your buyer will eventually ask about this. Know it before they do.
The Resale Problem Specific to Leasehold
A leasehold property also degrades mathematically with time. A unit sitting on a 99-year lease from 1998 is now 27 years into that term. A buyer acquiring it today gets 72 years of use. That affects what any future buyer will pay for it, which affects what your current buyer’s exit strategy looks like, which affects whether they want to transact at all. This is not a theoretical concern — it is a real objection you will hear from any experienced investor.
The lesson for listing agents: establish ownership type from the first documentation review, before you write the listing, before you set the asking price, and certainly before you show the property. Always verify the ownership type directly with the DLD or your conveyancer before making an offer.
The NOC: Where Leasehold Adds a Layer (and Time)
For any resale — freehold or leasehold — the NOC process is a standard gate. In secondary market transactions, the seller must obtain a No Objection Certificate from the property developer. The NOC confirms that all service charges are paid and that the developer has no objection to the sale. Without an NOC, the transfer cannot proceed.
NOC fees typically range from AED 500 to AED 5,000 plus VAT, and the seller is normally responsible for paying them.
In freehold areas, the NOC process — while never fast — is relatively standardised. Developers in the established freehold districts deal with resale volume daily and have predictable systems. In leasehold areas, and particularly in older or mixed-use areas where the freeholder structure is more complex, the NOC process can be slower, involve additional clearances, or require sign-off from parties beyond the developer alone. As the agent coordinating a shared deal, that additional time translates directly into a longer gap between Form F signature and the DLD transfer — which, in a deal without a written split agreement in place, is exactly when disputes surface.
Off-Plan in Freehold Zones: The Escrow Reality
When the deal is off-plan, the ownership zone determines whether a legitimate purchase is even legally possible for a foreign buyer in the first place. RERA registration confirms a developer’s legal authority to develop, market, and sell real estate projects in Dubai. Without this registration, a developer cannot open an escrow account, register a project with the DLD, or legally advertise any off-plan property.
Under Article 6 of Law No. 8 of 2007, developers are required to establish dedicated escrow accounts for each off-plan project. All buyer payments must be deposited into these accounts, which are closely monitored by the Dubai Land Department and managed by RERA-approved trustee banks. The developer may only withdraw funds upon reaching verified construction milestones certified by a RERA-approved engineer.
This escrow requirement applies only within Dubai’s regulated framework — which means, practically, only in projects that sit on land the developer has legitimately registered and which falls within a zone where the relevant buyer can hold title. An agent selling off-plan to a non-GCC buyer in an area that is not designated for foreign freehold ownership is not simply doing a difficult deal; they are in territory where the title at handover will not match what was implied at the point of sale. That becomes your problem at commission time.
Commission in a Shared Deal: Where Freehold Complexity Meets Real Money
Most agents reading this already know the standard rates. A Dubai real estate agent typically charges 2% of the price on a sale and 5% of annual rent on a lease, plus 5% VAT. The 2% figure is not enforced in law; it is a market standard that has been established over time. In primary off-plan deals, developers usually cover the commission, meaning buyers often pay nothing extra. In secondary market transactions, however, the buyer is usually responsible.
Where commission disputes actually start is in shared deals — two agencies, one transaction, no exclusive mandate, and a verbal agreement on the split that nobody wrote down before the deal closed.
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. The RERA form designed for exactly this purpose is Form I.
RERA Form I is the agent-to-agent collaboration form, mainly applicable when several agents are involved in one joint transaction concerning a property sale or lease. In Dubai’s cooperative brokerage ecosystem, multiple agencies often work together, and Form I confirms which agent introduced the buyer and how commissions will be shared. When two brokers collaborate — one representing the buyer, one the seller — Form I governs the commission split and professional conduct.
Commission must be agreed in a written contract — Form A, Form B, or Form I, depending on the deal. Everything should be in writing on the appropriate RERA form. A verbal agreement that commission will be a certain percentage holds very little weight if a dispute arises, and disputes over commission are not uncommon in a market where transaction values are high.
How the Area Type Shapes the Split Conversation
Here is where freehold versus leasehold creates a specific dynamic that working agents recognise. In the established freehold communities — Marina, Downtown, Business Bay, JLT — deal volumes are high, co-broke culture is mature, and most experienced agents understand what a standard split looks like. Deals move fast. That speed creates pressure to agree on splits verbally, in a WhatsApp thread, or not at all.
In leasehold areas, mixed-use developments, or areas mid-conversion from leasehold to freehold, the deals are typically slower and more complex. The buyer pool is more restricted, the NOC process is less predictable, and the path to the DLD counter has more steps. More steps means more time. More time means more opportunity for the verbal split agreement to be forgotten, reinterpreted, or denied.
Separately, in Ejari-regulated rental transactions — whether the property sits in a freehold or leasehold area — the commission dynamics involve a different timeline. Once a tenant is secured, the lease is formalised through Ejari registration. In a co-broke rental deal, the commission is earned at signing, but if the split was never documented, one agency’s agent can — and will — collect from the tenant and the other side sees nothing, because there is no signed Form I to enforce. The Rental Disputes Centre handles landlord-tenant matters; inter-agency commission disputes sit with the DLD and RERA.
The Post-Dated Cheque Problem in Leasehold Rentals
Dubai’s rental market still runs on post-dated cheques for rent payment. Tenants hand over four, three, two, or sometimes twelve cheques at signing. The commission cheque — separate from rent — is also typically a cheque to the agency. In a co-broke rental deal in a leasehold building, the agent who collects the tenant’s commission cheque is typically the buyer’s side. If no split agreement is signed, the listing agent’s share of that cheque has no documentation behind it.
The cheque is real money sitting in one brokerage’s account. The claim the other agency has on part of it is supported only by a WhatsApp message or a phone call. In practice, the strongest cases are the ones with a paper trail: a WhatsApp thread quoting the fee, a bank transfer or cheque record, and the tenancy contract. Verbal-only disputes over cash payments are far harder to resolve. Form I is the paper trail. Without it, the dispute is almost impossible to win cleanly, and even if one party is clearly right, pursuing the claim costs time and management attention that neither side can easily spare.
The Form F Moment: Why Timing Matters More Than People Admit
Form F, known as the Memorandum of Understanding, is one of Dubai’s most important real estate forms. It is the purchase agreement between the seller and the buyer, signed once the buyer has chosen the property and a price has been decided between the two parties. The Dubai Land Department Form F covers property and financial details and the commission to be paid to the seller’s and buyer’s agents.
The Form F moment is when the deal becomes enforceable. It is also the moment when, in a shared deal, the question of who gets paid how much can no longer be resolved without escalation if it was not documented before. Most agents consider commission earned when the buyer and seller sign the MOU, and this is the standard expectation supported by RERA in disputes.
Here is the sequence that causes problems. Two agencies agree verbally on a 50/50 split. The deal moves fast. The Form F is signed without a Form I in place. The buyer pays the commission cheque to one agency. The other agency follows up. The first agency offers 30% instead of 50%, knowing the other side has no signed document. The dispute drags on for weeks. Neither agency looks good. The deal may already have transferred by the time it is resolved, removing whatever leverage either side had.
This sequence plays out in every area type, but it is more common in freehold deals in high-volume areas precisely because those deals move quickly. Speed is the enemy of paperwork. Form F can only be generated by a licensed RERA broker through the Trakheesi or Dubai REST platforms — buyers and sellers cannot create this document themselves. The agent controlling the Form F has leverage in the final moments before the signature. Use that leverage to also push Form I to completion before the ink dries on the MOU.
VAT on Commission: The Leasehold Rental Exception That Catches Agents Out
Since the introduction of VAT in the UAE in January 2018, a 5% Value Added Tax applies to real estate brokerage services. In a sale, this is straightforward. On a AED 2,000,000 apartment purchase, the commission is AED 40,000 plus AED 2,000 VAT, totalling AED 42,000.
In a rental, it is important not to assume residential rental commission is automatically VAT exempt. The residential lease itself may have a different VAT treatment, but the broker’s agency fee is a separate service. If the brokerage is VAT-registered and the service is taxable in the UAE, 5% VAT may be charged on the commission. Always ask for a tax invoice showing the broker’s Tax Registration Number if VAT is added.
In a shared deal, the VAT obligation also raises a specific question: which agency issues the tax invoice to the client, and how does the split interact with each brokerage’s VAT accounting? This is not an academic concern. When two agencies split a commission and both are VAT-registered, the mechanics of who invoices the client, for how much, and who accounts for the VAT on their share need to be agreed and documented. Form I sets the split. Your finance team handles the VAT. But they cannot handle it correctly without knowing what the split is, in writing, before the deal closes.
What Goes Wrong When the Area Type Is Not Confirmed Before the MOU
Let’s work through the specific failure chain. Agent A lists a property in an older mid-city building. The community is mixed — some blocks freehold, some leasehold, a conversion application in progress for one tower. Agent B brings a GCC national buyer who is specifically interested in freehold. Agent A, working from memory, says the property is freehold. No one checks the DLD record. Form F is signed. Commission cheques are issued. The parties proceed to the trustee office.
At the trustee office, the title deed comes out as leasehold — a 99-year lease with 68 years remaining. The buyer’s lawyer objects. The buyer wants to renegotiate or withdraw. The seller refuses. The deal falls into dispute. The Form F is now a contested document. Both agents are caught between their respective clients with a commission they cannot collect until the matter resolves — and if the deal collapses, may not collect at all.
Agents who lack the administrative support to handle the delicate NOC and transfer process expose themselves to risk: a botched transfer due to incorrect paperwork can delay the deal by weeks or even cause it to fall through, costing the buyer the 10% security deposit.
The ownership-type error also creates a co-broke dispute on top of the client dispute. Neither agent is technically at fault for the other’s misrepresentation, but both are caught in the fallout. Even if eventually resolved in one party’s favour, the time cost and reputational damage are real.
The prevention is simple and takes five minutes. The simplest way to verify ownership status is through the Dubai REST app, which lists every registered property in Dubai along with its ownership type, title deed status, and developer details. Owners can also request a verification report from DLD or through a RERA-registered brokerage.
Check it before you list. Check it before you co-broke. Check it before you present any offer.
The Specific Friction Points, By Transaction Type
Secondary Market Sale — Freehold Area
- Buyer pool: unrestricted by nationality
- Title deed: permanent freehold, registered at DLD
- NOC: required from developer, typically AED 500–5,000, paid by seller
- Commission: 2% from buyer plus 5% VAT
- Co-broke split: should be documented on Form I before Form F is signed
- Common dispute trigger: verbal split, one agency holds commission cheque, other side not paid
Secondary Market Sale — Leasehold Area
- Buyer pool: effectively the same in practice, but buyer must understand the title is time-limited
- Title deed: leasehold interest, registered at DLD with term and expiry date
- NOC: required, potentially more complex depending on freeholder structure
- Commission: same convention, 2% plus 5% VAT
- Common dispute trigger: area status not confirmed, client dispute at transfer bleeds into co-broke dispute
Off-Plan Sale — Freehold Zone
- When buying off-plan from a developer — whether through an agent or directly at the sales office — the commission is built into the developer’s cost structure and paid to the agent by the developer.
- Off-plan commissions can go up to 8%, and they are normally paid by the developer, not the buyer.
- Oqood registration required before any payment is collected
- Common dispute trigger: two agents claim they introduced the buyer; developer pays only one; no co-broke agreement in writing
Rental — Freehold or Leasehold Building
- Commission: 5% of annual rent plus 5% VAT, conventionally paid by tenant
- Ejari registration mandatory for the tenancy to have legal standing
- Post-dated cheques for rent are standard; commission cheque separate
- Common dispute trigger: tenant pays commission to one agent; no Form I covers the co-broke split
The Principle That Removes All of It
Every scenario above has the same root. Two agents do the work, the client pays someone, and the documentation to enforce the agreed split either does not exist or is too vague to be binding.
The fix is not complicated. The fix is sequence. Form I — the agent-to-agent collaboration agreement — should be signed before the client’s money moves in any direction. Not after. Not simultaneously. Before. The same is true for the split in an off-plan deal: agree it in writing with the other agency before the client reaches the developer’s sales counter.
Both agencies should sign Form I to record the introduction and guarantee the commission split after the sale. This ensures fair cooperation and eliminates disputes between agencies.
When the split is agreed, signed, and documented before the client pays anyone, there is nothing to dispute. The commission cheque arrives at the collecting agency; the split is enforceable; both sides are paid from the same pool, in the right proportions, because everyone agreed to those proportions before the deal closed.
The ownership type — freehold or leasehold — changes the title, the buyer pool, the NOC complexity, and sometimes the timeline. But it does not change the fundamental logic of how commission disputes start. They start when the split is an unwritten assumption rather than a signed agreement.
The agents who consistently get paid on time, in full, on co-broke deals, are the ones who treat the inter-agency commission agreement with the same seriousness they give the Form F. Both documents matter. One protects the client’s transaction. The other protects the agent’s income. Neither should ever be left for later.
