Dubai Court of Cassation (General Assembly), Resolution No. 1 of 2022, 31 October 2022
Dubai legislation (Articles 3 and 24 of Local Order No. 32 of 1987 regulating real estate brokerage and Articles 3 and 21 of Regulation No. 85 of 2006 on the Register of Real Estate Brokers) prohibits any natural or legal person from brokering the sale, purchase or lease of property in Dubai without a licence and registration with the Land Department, and penalises breaches. That rule is one of public policy. Where a brokerage agreement is declared void for lack of a licence, the unlicensed broker may not claim his fee, compensation or the expenses he incurred in doing the work, because the claim rests on an unlawful cause.
The General Secretariat of the Judicial Council asked the General Assembly to resolve two conflicting principles of the Court of Cassation on whether an unlicensed broker is entitled to anything when the brokerage agreement is declared void. Under the first, each party must return what it received under the rules on undue payment (Article 321 of the Civil Transactions Law), even where the nullity stems from illegality, and if return in kind is impossible because the contract has been performed, the party must pay the value of the benefit received. Under the second, the broker may claim neither compensation, fee nor expenses, because his claim rests on an unlawful cause. The Assembly's secretariat favoured the second where the broker knew of the cause of nullity.
The Assembly explained that public-policy rules serve a higher political, social or economic interest that individuals cannot contract out of. The ban on brokering without a licence, in Local Order No. 32 of 1987 and Regulation No. 85 of 2006, which require licensing and entry in the Land Department's register of brokers and punish breaches with a warning or a fine of up to AED 5,000, aims to regulate the growing brokerage market, coordinate with the authorities, develop the real estate sector and protect all parties' trust and rights. It is therefore a rule of public policy. The public interest requires that an unlicensed broker not receive fees, profit or reward for his work and, in the Assembly's reasoning, that he return to the client any such sums he has received or compensate their value.
To unify the case law, the Assembly adopted the second principle: once a brokerage agreement is held void, an unlicensed broker cannot claim compensation, fees or expenses.
Commission claims are a frequent source of litigation in Dubai's property market. Intermediaries who broker sales or leases without the required licence and registration cannot use the courts to recover their commission, and the reasoning indicates that fees already paid may have to be returned. Developers, sellers and landlords dealing with intermediaries can rely on this public-policy rule.
| Articles 3 and 24 of Dubai Local Order No. 32 of 1987 regulating brokerage in the sale, purchase or lease of real property in the Emirate of Dubai |
| Articles 3 and 21 of Dubai Regulation No. 85 of 2006 on the Register of Real Estate Brokers in the Emirate of Dubai |
| Article 321 of Federal Law No. 5 of 1985 (Civil Transactions Law), relied on in the rejected line of judgments — text of article 321 Decided under this law; it has been replaced by Civil Transactions Law 2025. |
| Article 20 of Dubai Law No. 13 of 2016 on the Judicial Authority in the Emirate of Dubai |
“في حالة الحكم ببطلان عقد الوساطة لا يجوز للسمسار أو الوسيط غير المرخص له القيام بأعمال الوساطة المطالبة بالتعويض أو بأجره”Short quotation from the judgment as published by the court. The full judgment is on the court’s official service.
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