Real Estate Activity Report (REAR) submission by real estate brokers and agents and law firms as per Circular Number: 05/2022

Real Estate Activity Report (REAR)

Real Estate Activity Report (REAR) submission by real estate brokers and agents and law firms as per Circular Number: 05/2022 issued by the Ministry of Economy (MOE), UAE

What is Real Estate Activity Report (REAR)?

Ministry of Economy has recently issued a Circular (No. 05/2022 dated 24th June 2022), instructing the real estate brokers and the law firms, to report the specified transactions pertaining to real estate in the new report named as – Real Estate Activity Report (‘REAR’).

As mentioned by Ministry of Economy, the purpose of REAR is to curb the illicit investment in real estate in UAE and track down the high-risk transactions around real estate involving money laundering.

When is the Real Estate Activity Report (REAR) filing requirement coming into effect?

As per Circular No. 05/2022 issued by the Ministry of Economy, the said provisions for filing the Real Estate Activity Report (REAR) is becoming effective from 1st July 2022 for all real estate brokers and agents, and law firms.

Who is required to file REAR?

Though the circular is merely addressed to the Real estate brokers and agents, but on the official post over LinkedIn by UAE Financial Intelligence Unit, it has been specified that such report needs to be furnished by law firms as well.

Accordingly, all the real estate brokers / agents and lawyers are obligated to report the transaction pertaining to buy / sale of Freehold Real Estate*, which involves cash or virtual assets.

When is REAR required to be filed?

REAR is application only to the transactions of purchase and sale of Freehold Real Estate, where the payment is by way of any of the following (whether for a portion or the entire property):

  • Physical cash equal or exceeding AED 55,000 (single payment or through several transactions)
  • Virtual assets
  • Funds converted from Virtual asset

What are the obligations of DNFBPS when it comes to REAR filing?

Real Estate brokers / agents and Law firms have to obtain and record the following:

  • Identification documents of the buyer and seller
  • Receipts, invoices, contracts and Purchase & Sale Agreement

Along with obtaining relevant documents pertaining to buyer, seller and the transaction, agents and lawyers shall submit REAR on GoAML platform, capturing details of such transaction pertaining to freehold real estate.

Documentation Requirement for REAR

Documents to be obtained for buyer and seller, if

 

Individual

Corporate

 

   Valid Emirates ID; or

   Passport copy

   Trade License

   Articles of Association

   Register of Beneficial Owners

   Emirates ID or passport copy for all Beneficial Owners

   Emirates ID or passport copy for all shareholders/partners

 
 
 

REAR - An Additional Reporting

It is important to note that filing of REAR to report the transaction pertaining to freehold property is an additional requirement.

Real estate brokers /agents and lawyers are also required to file Suspicious Transaction Report / Suspicious Activity Report / Fund Freeze Report / Partial Name Match Report, as and when the same are applicable. Accordingly, along with filing of reports as prescribed earlier for reporting of sanctions or suspicion, additional REAR is to be filed to report all freehold property related transactions as prescribed above.

Summary of compliance requirements for Real Estate Activity Report (REAR)

It is important to note that filing of REAR to report the transaction pertaining to freehold property is an additional requirement.

Real estate brokers /agents and lawyers are not absolved from filing of Suspicious Transaction Report / Suspicious Activity Report / Fund Freeze Report / Partial Name Match Report, as and when the same are applicable. Accordingly, along with filing of reports as prescribed earlier for reporting of sanctions or suspicion, additional REAR is to be filed to report all freehold property related transactions as prescribed above.

Transaction

Mode of payment

(for a portion or entire property)

Actions by Real Estate Brokers/ Agents & Lawyers

Documents to be obtained

Individual

Corporate

Purchase and sale transactions of Freehold Real Estate

Physical cash equal or exceeding AED 55,000

Obtain & record

     Identification documents

     Receipts, invoices, contracts and Purchase/Sale Agreement

Submit REAR on GoAML platform

   Valid Emirates ID; or

   Passport copy

   Trade License

   Articles of Association

   Register of UBO

   Emirates ID / Passport for all UBO and shareholders / partners

Virtual asset

Funds converted from Virtual asset

AML UAE at your service

As required by the UAE authorities, Real Estate Brokers and Law firms shall have a policy in place to identify such transactions and timely report the same. Here, we may help you understand the new reporting requirements in detail, guide you around the identification of such transactions, and also, assist in the filing of this new report – REAR.

*Freehold Real Estate are the ones where the owner has an absolute ownership and control over the constructed property as well as land on which it is constructed, without any time limit. 

 

 

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About the Author

Pathik Shah

CISA, FCA, CS, DISA (ICAI), FAFP (ICAI)

Pathik is a multi-disciplinary professional with more than 22 years of experience in compliance, risk management, accounting, system audits, IT consultancy, and digital marketing. He has extensive knowledge of Anti-Money Laundering rules and regulations, and he helps companies comply with legal requirements. Pathik also helps companies generate value from their IT investments.