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Law regulating real estate brokerage.

A real estate broker must put in place a written brokerage contract, indicating the parties, the details of the property, the brokerage conditions, the broker's fees, etc with its client prior to undertaking any brokerage activities.

Government bodies and major stakeholders in the real estate industry in Qatar have praised the flexibility shown by the real estate market against the blockade. The market data for 2017 displayed a sizeable increase in the volume of real estate transactions "which could be between 8% and 12% increase in October and November last year respectively compared to corresponding months in 2016" as stated by a leading real estate brokerage company in Qatar. Government Officials have praised the role of economic and legal reform in bolstering the national economy, including the real estate sector, and have stated that "there is a high level of optimism in the growth of the real estate market in the years leading to the 2022 FIFA World Cup". The government reforms included (i) the introduction of the Law No 22 of 2017 Regulating Real Estate Brokerage (Law); (ii) approval of the Cabinet of Ministers of a draft law which expands the rights of non-Qataris to acquire real estate in Qatar, including land, buildings, residential units and detachment units in residential complexes; [note: this draft law has not entered into force at the time of drafting this article]; and (iii) the recent lifting of visa restrictions for the nationalities of some 40 countries with the result that the nationals of some 80 countries can now enter Qatar on a visa waiver. This article identifies the new changes introduced by the Law. Enforcement of the Real Estate Brokerage Law The Law which came into effect on 26 January 2018 repealed the Law No 13 of 2011 with respect to regulation of real estate brokerage (Old Law). Entities and/or individuals whose business is governed by the Law are required to comply, before 26 July 2018. The Minister of Justice (Minister) may at his sole discretion issue a decision extending the period to comply with the new Law. Amendments introduced in the Real Estate Brokerage Law a) Regulatory Body Under the old law, the Ministry of Economy and Commerce was the regulatory body responsible for monitoring real estate activities in Qatar, including the activities of real estate brokers. This authority has now been subsumed under the powers of the Ministry of Justice pursuant to the Law. b) The Committee of Real Estate Brokers' Affairs The law has introduced the Committee (Committee) of Real Estate Brokers' Affairs which did not previously exist under the Old Law. The responsibilities of the Committee include amongst other things, (i) considering the grievances filed by parties against the decisions of the Ministry of Justice; (ii) considering complaints filed by or against a real estate broker; and (iii) estimating real estate broker's fees and commissions should a dispute arise. c) Definition of Real Estate Brokerage The law has expanded the definition of Real Estate Brokerage to include real estate promotions, auctions, administrative activities on behalf of third-parties and pricing in accordance with the regulations issued by the Minister to this effect. d) Requirements of Real Estate Brokers New requirements set out under the law require (i) individual real estate brokers to pass tests and training courses specified by the Committee to qualify as licensed real estate brokers; and (ii) real estate brokers to provide evidence that they have not worked for the Ministry of Justice or any other administrative department in other ministries which regulate real estate or urban planning unless three year period has expired after the end of their employment with such government entities. The manager of a real estate brokerage company is now required to satisfy all the conditions of an individual real estate broker, including the requirement to be a Qatari national. e) Non-Qatari Real Estate Brokerage companies The law states that foreign real estate brokerage companies may be licensed in accordance with new regulations issued by the Cabinet of Ministers. These regulations have not been issued at the date of this article. f) Prohibited Activities As an additional requirement to the Old Law, Article 14 of the Law provides that a real estate broker must put in place the following documents prior to undertaking any real estate brokerage activities: (i) a written brokerage contract with its client indicating the parties, the details of the property, the brokerage conditions, the broker's fees, the capacity of the person authorised to undertake the disposition of the property; and (ii) a certified copy of the title deed of the property; under the Old Law a copy of the title deed was sufficient. A broker may not undertake activities that fall outside the scope of real estate brokerage as defined under the Law, or activities that would create a conflict of interest in terms of its duty as a real estate broker. g) Real Estate Broker's Remuneration In addition, the Law has introduced a new provision which deals with the determination of the broker's remuneration if the brokerage contract is silent. Article 17 of the Law states that the broker's remuneration will be determined by the Committee on the basis of the normal custom, otherwise the fees shall be estimated based on the effort and time spent by the broker. The fees, however, may not exceed 1% of the contract value if the work calculation involves transfer of ownership or transfer of a right in rem, or a fee equal to 50% of a month's rent if the work involves a lease. h) Disciplinary actions The Committee may take disciplinary action against the real estate broker if found in breach of the law. The disciplinary actions include: 1. warning; 2. suspension of licence for a period not exceeding six months; or 3. permanent revocation of licence. The Committee may post the penalty on the Ministry of Justice website if the licence has been suspended for a period not exceeding six months or has been permanently revoked. i) Penalties Article 24 of the law raised the penalty for undertaking brokerage activities without licence, or during the suspension of the licence, from QR20,000 to QR100,000, and added an additional penalty of imprisonment for a period not exceeding three months to the same violation. Non-Qataris involved in such violations will be deported from Qatar. * For further information on this/other legal matters, please contact David Salt ( [email protected] ) or Yousef Fakhoury ( [email protected] ).

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Publication:Gulf Times (Doha, Qatar)
Geographic Code:7QATA
Date:May 8, 2018
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