Department of Municipal Affairs and Transport (“DMAT”) introduces caps on Developer Fees and Broker Fees and the Standard Form of Brokerage and Sub-Brokerage Agreements.

The Department of Urban Planning and Municipalities (“DPM”), previously known as DMAT, has set a cap of AED 5,000 on administrative fees which developers may charge on disposals. This cap, introduced in Decision No. 183 of 2017 of the Chairman of DMAT, was effective from 15 November 2017.

Decision No. 183 of 2017 also sets caps on broker commission fees, as follows:

• for sales, a cap of 2% of the purchase price (subject to a maximum fee of AED 500,000); and
• for leases, in the absence of an agreement on the brokerage fees, a cap of 5% of the total rent of the entire lease term.

DPM also published standard forms of brokerage agreements and sub-brokerage agreements. Use of these standard agreements is now compulsory, however, it is possible to include additional provisions.