If a buyer makes cash payments of AED 55,000/- or more directly to the seller or developer, how would REAR reporting obligations apply to the broker if these transactions occur without the broker’s knowledge?
The real estate agent/broker is required to submit REAR when the purchase/sale of freehold property involves settlement towards the property value in cash equal to or exceeding AED 55,000.
However, when the cash payment is directly made by the buyer to the seller/developer without the knowledge of the broker, then it would be difficult for the broker to track the triggering event (i.e., cash payment).
In such cases, the real estate agent is recommended to include a clause in the agreement with the seller/developer requiring the seller/developer to flag such direct cash payments to the broker for them to adequately report and comply.
Additionally, the real estate agent should also tighten its AML/CFT Policy related to REAR filing, providing that the real estate agent’s responsibility to identify the cash payments is limited to the Sale Deed (payment clause) initially executed between the buyer and seller/developer and the transparency on the part of the seller/developer to disclose such directly received cash payments to the broker/agent.
Learn more about [REAR requirements]
(Real Estate Activity Report (REAR) submission by real estate brokers and law firms : 05/2022)
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Thats insightful. Thank you Sir.