--- title: "How primary-market commissions differ from secondary" description: "A plain-speaking breakdown of how Dubai off-plan and resale commissions work, who pays, when, and how to avoid getting burned on splits." category: "off-plan-developers" readingTime: 12 --- ## The Moment You Realise They Work Differently Picture this: you've closed two deals in the same week. One is a resale apartment in JVC — buyer's paid, the Form F is signed, you have a cheque in your hand. The other is an off-plan unit in a new launch, SPA signed, Oqood submitted, buyer thrilled. You're waiting for your commission on the second deal. A week passes. Then another. You follow up with the developer's sales team. They point you to a payment schedule nobody walked you through at the time of booking. That second scenario is not unusual. It is the direct consequence of treating primary-market commission as if it works the same way as secondary-market commission. It does not. The payer is different, the timing is different, the documentation that protects your claim is different, and the risk of a co-brokered split going wrong is different in each market. Once you understand where those mechanics diverge, you can set your deals up correctly from the start — and stop being surprised when the money does or doesn't arrive. ## Who Pays the Commission: The Fundamental Split The most foundational difference between primary and secondary market commissions is not the percentage. It is who actually writes the cheque. ### Secondary market: the buyer (and sometimes the seller) pays The standard commission for a brokerage in the secondary resale market is 2% of the transaction price, paid by the buyer. This rate is set by RERA convention rather than law, meaning it is technically negotiable. In practice, the buyer's agent collects from the buyer, and the seller often has their own agent collecting separately. Both the buyer and the seller pay 2% of the sale price plus VAT as standard commission on resale apartments and villas, each to their own agent. That means in a clean two-agency secondary deal, the total commission paid across the transaction is 4% of the property value — split between two brokerages, then split again internally between each brokerage and its agent. All commissions are usually subject to 5% VAT and must be documented in official contracts. On a straightforward AED 2 million resale, the buyer's 2% commission becomes AED 42,000 once VAT is added. That number needs to appear on a proper VAT-compliant invoice, issued by the brokerage — not the individual agent. ### Primary market: the developer pays Unlike the secondary market where the buyer often pays around 2%, off-plan buyers generally do not incur brokerage fees. Instead, the commission is built into the developer's marketing and sales structure and paid to the authorised brokerage handling the transaction. For off-plan properties, the commission may vary depending on the project, developer, and brokerage agreement. Typically, the range is between 2% to 8%. The wide band matters. A tier-one developer with a flagship project, strong organic demand, and an established track record will sit at the lower end. A smaller developer trying to generate velocity at a new launch may push the rate significantly higher to incentivise brokerages to show up on launch day. Tier 1 developers like Emaar pay lower base rates because their brand drives organic demand. But those lower-rate projects still tend to get priority attention from experienced agents because the buyer is easier to convert and the paperwork is cleaner. The commission figure alone does not tell the whole story of how rewarding a deal actually is. ## The Mechanics of Getting Paid: Timing Is Everything In the secondary market, when you are paid is relatively straightforward — or at least it should be. The commission flows when the deal completes and the Form F progresses to transfer. In the primary market, that clarity often disappears. ### Secondary market payment timing Real estate commission in Dubai is commonly paid by cheque, bank transfer, or cash upon signing the sales agreement or tenancy contract, depending on the brokerage. For secondary sales, the norm is payment at or around the MOU stage, with the actual disbursement happening at transfer through the Dubai Land Department. In practice, commission cheques are often collected by the agent at the time of Form F signing, with some deals requiring the cheque to be cleared only at the point of actual transfer. Commission should always be paid by cheque made out to the brokerage, not to the individual agent personally. This is a RERA requirement and it creates a paper trail that protects both parties if a dispute arises later. This matters particularly in secondary co-brokered deals, where two agencies are both expecting payment at a predictable moment. Both agencies know who holds the commission cheque and when it becomes payable. Disputes in secondary deals tend to be about entitlement — who brought the buyer, who holds the mandate — rather than about timing. ### Primary market payment timing Primary market commission timing is controlled entirely by the developer, not by the agent or the brokerage. A typical off-plan commission structure runs: Booking → construction instalments tied to milestones → optional post-handover tail. That trail can stretch for years. A developer might pay a portion of the commission on booking, another tranche when the SPA is signed, and a final portion at handover — which for some projects is three to five years away. Developer payment plans typically span 3–8 years, with exceptional cases reaching 10 years. If your commission is tied to the same schedule, that means your payment is also stretched across that timeline. The critical thing every agent working off-plan needs to establish before presenting a project: what is the commission payment schedule, and is it in writing? Some developers pay the full commission within 30 to 45 days of the SPA being signed. Others stage it. Others have been known to delay until a client has made a defined percentage of their payment plan instalments. Get the developer's commission payment terms in a written brokerage agreement before you bring a buyer — not after. Commission rates vary based on developer size, project stage, and market conditions. The timing of those payments varies just as much, and that variability is one of the primary reasons experienced off-plan agents prioritise developers with known, reliable payment records over those offering higher headline rates with ambiguous disbursement terms. ## Co-Brokering a Secondary Deal: Form I Is Not Optional In a secondary deal without exclusive mandate — the standard situation in Dubai's open-listing environment — co-brokering is the norm. One agent holds the listing, another brings the buyer. That interaction is governed by Form I. When two brokers collaborate — one representing the buyer, one the seller — Form I governs the commission split and professional conduct. Form I comes into play when a buyer's agent identifies a suitable property that is listed by a different agent. Before the buyer's agent can arrange viewings, share the property's details, or participate in negotiations, both agents must sign Form I. This protects the listing agent's client relationship, ensures the buyer's agent receives their agreed share of commission, and prevents disputes about who facilitated the sale. A verbal commission split agreement is not enforceable under RERA regulations. If a dispute arises between two agents over who is owed what, the agent without a signed Form I is in a very weak position. Commission splits in co-brokered deals are commonly 50/50. But the split itself is less important than the fact that it is documented before any viewing, any negotiation, and certainly before any offer is made. In fast-moving markets like Dubai, agents sometimes proceed on trust or a phone call agreement when time is short. This almost always creates problems if the deal becomes complicated. The anatomy of a secondary co-brokered commission dispute is almost always the same: two agents who agreed a split verbally, a deal that took longer than expected, and a moment at the end of the transaction where one party decided the other had not done enough to justify their cut. Without Form I, there is nothing enforceable to point to. ## Co-Brokering an Off-Plan Deal: A Different Kind of Risk When two agencies cooperate on a developer deal, the mechanics are different again. There is no Form I between agents in the same way as in secondary — the relevant agreement is the brokerage agreement each agency holds with the developer, combined with whatever written arrangement the two agencies make between themselves about how the commission will be divided. Here is where primary-market co-brokering creates a unique type of friction. In a secondary deal, the commission comes from the buyer, and both agencies are typically present at — or at least aware of — the moment of payment. In a primary deal, the developer pays the registered brokerage. If two agencies have cooperated on the deal and only one is formally registered with the developer as the selling agency for that transaction, the unregistered agency is entirely dependent on the registered one to pass their share across. If that inter-agency split was agreed verbally on a WhatsApp message, it is not binding. If it was agreed in a written letter or email clearly stating the percentage and timing, it carries more weight — but it is still not the formal RERA documentation framework that would apply in a secondary deal. This is a gap that catches agents every year, particularly those who bring buyers to developers where they do not have a direct brokerage relationship. The safest position when co-brokering an off-plan deal: get the split agreed in writing between the two agencies before the buyer meets the developer's sales team. Define the percentage, define the timing (which should mirror the developer's commission release schedule), and have both agencies sign that agreement. It will not have the same legal scaffolding as a Form I in a secondary deal, but it is infinitely stronger than nothing. Brokers who have to manage percentage-of-annual-rent commissions, phased payments by developers of the new commercial inventory, co-broking deals and RERA-compliant paperwork face a challenging task. Manual commission tracking cannot withstand such pressure: failure to calculate splits after a change in broker tiers, delays in payments from a lease with multiple installments, or lack of compliance documentation on referral fees silently undermine trust. ## How the RERA Forms Map Onto Each Market Understanding which RERA forms apply — and where — removes most of the ambiguity about who is owed what. ### Secondary market - **Form A**: The listing agreement between the seller and the listing agency. It specifies the commission payable to the mandate-holding broker on successful sale. Form A specifies the commission payable on successful conclusion of the sale. The Dubai market standard is 2% of the sale price plus 5% VAT on the commission, payable by the seller to the mandate-holding broker. - **Form B**: The buyer representation agreement. Specifies what the buyer's agent is entitled to earn. - **Form I**: The inter-agent agreement that governs co-brokering. The agent-to-agent agreement specifies the property in question, the names and RERA registration details of both agents, the commission split arrangement (typically 50/50 of the total commission), confidentiality obligations regarding client information, and terms governing how the agents will cooperate through the transaction. - **Form F (MOU)**: The contract of sale between buyer and seller. Form F is the Contract of Sale between the buyer and seller, often referred to as the Memorandum of Understanding (MOU). Commission is acknowledged and referenced within Form F, anchoring the agent's entitlement at the contractual moment of sale. Contract F itself can also mention the agent's commission structure or details. This ensures all parties acknowledge what the brokers should earn when the deal is done. ### Primary market In a developer deal, the RERA forms familiar from secondary transactions are partially replaced by developer-specific documentation. The developer issues its own SPA. Once the SPA is signed, the developer registers the contract on Oqood, the Dubai Land Department's off-plan register, creating the official record of the buyer, unit, and payment plan. The brokerage agreement between the developer and the agency — sometimes called a developer-broker agreement or channel partner agreement — is the document that establishes the agency's right to commission. It specifies the rate and, critically, the payment schedule. This is the document agents need to review with the same attention they would give to a Form A in a secondary deal. ## The Escrow Account Is Not Your Protection as an Agent One technical point that confuses agents who are new to off-plan: RERA mandates that 100% of off-plan sales proceeds are held in an escrow account maintained by a UAE-licensed escrow agent, typically a bank. Developers may only withdraw from escrow in line with verified construction milestones certified by an independent consultant. This escrow mechanism — established under Law No. 8 of 2007 — protects the buyer's instalments against developer misuse. The mechanism is governed by escrow law and RERA registration, but those protections cover developer misuse of funds, not project failure. Critically: this escrow account does not contain your commission. The developer normally pays the agent from the project's marketing budget. That is a separate line from the buyer's instalments sitting in the regulated escrow account. So if a developer's marketing budget runs dry, or if the developer is experiencing cashflow issues unrelated to construction progress, your commission can be delayed or at risk even in a project where the escrow account is fully intact and buyer funds are protected. The escrow protects the buyer. It does not protect you. Understanding that distinction is not a technicality — it is foundational to how you assess developer counterparty risk when deciding which off-plan projects to actively sell. ## Where Disputes Are Born The mechanics above describe how things are supposed to work. Here is how they go wrong. ### In secondary deals, disputes start with undocumented co-brokering The absence of a signed Form I before a viewing is the single most common origin of a secondary commission dispute in Dubai. Without Form I, Agent A risks Agent B approaching the buyer directly and cutting them out of the commission. Equally, Agent B risks Agent A's buyer going back to the seller independently and removing the listing agent from the deal. The form creates mutual accountability and makes the commission split legally enforceable. Secondary disputes also arise when commission terms in Form A or Form B are vague about who owes what in a co-brokered scenario. The listing agent collects from the seller's side, the buyer's agent collects from the buyer's side, and if neither side has documented the internal split before the deal closes, the conversation at the end becomes uncomfortable at best and litigious at worst. If a client refuses to pay the agreed commission after a successful deal, the broker can file a complaint with RERA or take legal action to claim it, because it is a breach of contract. But having a legal remedy available is not the same as having a fast one. The RERA Real Estate Dispute Settlement Centre (RDSC) process takes time. Prevention — through documentation — is considerably more efficient than cure. ### In primary deals, disputes start with assumed rates and delayed payments Off-plan commission disputes rarely involve the developer disputing who made the sale. They involve agents who misunderstood the commission rate, the payment schedule, or — most damagingly — the inter-agency split on a co-brokered deal. When two agencies cooperate on a developer transaction, and the developer pays only one of them, the second agency's recourse depends entirely on what they agreed in writing beforehand. A common and avoidable scenario: Agency A has a strong developer relationship and registers the deal. Agency B brought the buyer. The split was agreed on a phone call. The developer pays Agency A. Agency A takes a different view of the split than Agency B remembers discussing. Without a written agreement signed before the booking, Agency B has very little to stand on. Rate assumptions cause similar problems. An agent who tells a buyer they will earn 5% on a deal because that is what they heard at the launch event, then discovers the developer's brokerage agreement with their agency specifies 3%, has a gap that will either come out of their own pocket or create friction with their agency. In practice, off-plan commissions often fall in the 2–8% range, but you should always quote the contracted figure — never a rule of thumb. ## The Pipeline Problem: Off-Plan Commission and Cash Flow Secondary market commission is relatively predictable. You work a deal, it closes, you get paid. The cycle from Form A to payment can run weeks to a few months in most straightforward secondary transactions. Off-plan commission can run on an entirely different timeline. If a developer stages commission payments — say, 50% at SPA and 50% at handover — and that project has a two-year construction programme that extends to three, the tail of your commission is also extended. You close the deal today. You get the second half of your commission in 2027, or 2028, or whenever the keys go out. This is not inherently a problem, but it is a cash-flow reality that agents working primarily in the off-plan space need to plan around. The pipeline of commissions owed but not yet paid is an asset — but only if it actually gets paid. Verifying that the developer has a track record of honouring their commission schedules on time is due diligence that pays for itself. The secondary market does not create this kind of extended receivable in the same way. Once the transfer is registered at the DLD and the commission cheque clears, it is done. That simplicity is part of why many experienced agents split their time deliberately between both markets: off-plan for volume and the higher headline rates at launch, secondary for the predictable, shorter payment cycle. ## VAT: Applied Differently, But the Rule Is the Same In Dubai, real estate commission is subject to 5% Value Added Tax (VAT). This VAT is calculated on top of the agreed commission amount and is payable by the party responsible for the commission. In secondary deals, the VAT on the buyer's agent commission is paid by the buyer, and the VAT on the seller's agent commission is paid by the seller. In off-plan deals, the developer pays the commission and the VAT on it is accounted for within the developer's own tax obligations on the marketing spend. The headline commission rate quoted by a developer to a brokerage is typically exclusive of VAT — confirming this before you brief your team matters, because the brokerage's invoice to the developer must be VAT-compliant and correctly reflect the registered entity's VAT number. VAT invoices must show the VAT registration number, itemize the commission and VAT amounts separately, and meet UAE Federal Tax Authority requirements. If an agent cannot provide a proper VAT invoice, this is a significant red flag and may indicate they are not operating legitimately. In co-brokered secondary deals, each agency issues its own VAT invoice to the relevant payer (buyer or seller). In a primary deal where one agency registers the transaction with the developer, only that agency issues a VAT invoice to the developer — which is another reason the inter-agency written agreement must specify what portion of the net payment flows to the co-brokering agency, and when. ## The Principle That Removes the Friction Every significant problem described in this article — the disputed co-broker split, the ambiguous developer commission rate, the delayed payment that nobody planned for, the agency that collects and doesn't pass on — traces back to the same root cause: people are agreeing terms verbally, or assuming them, and only trying to nail them down when money is on the table and positions have hardened. The principle that fixes this is simple, even if the execution requires discipline: every commission arrangement — the rate, the split between parties, and the payment timing — should be agreed, documented, and signed by all relevant parties before the client pays anything. Before the booking deposit. Before the first viewing in a co-brokered secondary deal. Before the buyer steps into the developer's sales suite. When the split is agreed in writing before money changes hands, and when every party is paid at the same time from the same transaction event rather than sequentially — one party first, then the other — the disputes vanish. The argument about who is owed what only exists because someone was left waiting for another party to choose to pay them. Remove the wait. Remove the choice. Build deals from the start so that payment is simultaneous, documented, and inevitable — not negotiated again at the end. That is true whether you are working a resale with a co-broker across town, or splitting a developer commission with an agency that introduced the buyer to your relationship. The market is not the problem. The documentation — and the habit of getting it signed before the deal moves forward — is the solution.