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
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’).
What is the effective date for Real Estate Activity Report (REAR) filing?
As per Circular No. 05/2022 issued by the Ministry of Economy, the said filing requirements for the Real Estate Activity Report (REAR) will become effective from 1st July 2022 for all real estate brokers and agents licensed in the UAE.
Who are covered under Real Estate Activity Report (REAR) filing?
Though the circular is primarily addressed only to the Real estate brokers and agents, on the official post over LinkedIn by UAE Financial Intelligence Unit, applicability has been mentioned for law firms as well.
Accordingly, all the real estate brokers / agents and legal firms lawyers are obligated to report the transaction pertaining to purchase/ sale of Freehold Real Estate, which involves cash or virtual assets.
What are the modes of payments subject to REAR?
REAR is applicable 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 entire or a portion of the 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 procedures to be followed by real estate agents and brokers as per circular no.05/2022 from 1st July, 2022?
With effect from 1st July 2022,all real estate brokers and agents to undertake the following procedures:
|Description of transaction||Mode of Payment||Documents / Procedures|
|Purchase of free hold real estate||a) Physical Cash Transaction>/= AED 55,000 (single or several transactions )||1. Obtain and record identification documents (Emirates ID, or Passport copy).|
2. Obtain and record receipts, invoices, contracts and Purchase & Sale Agreement.
3. Submit a ‘Real Estate Transaction Report’ (“REAR”) via the Financial Intelligence Unit’s (“FIU”) goAML platform.
|b) Virtual asset(like bitcoins)|
|c) Funds used for the transactions are converted from Virtual asset|
What is a Freehold Real Estate?
Freehold Real Estates are the ones that the owners have an absolute ownership and control over the constructed property as well as the land on which such property is constructed without any time limit.
What are the identification documents to be obtained to comply with Real Estate Activity Reporting requirements?
|Type of person||Identification documents to be obtained|
|For any real estate transaction, with Legal Persons(buyer/seller)||Trade License; –|
Articles of Association; –
Register of Beneficial Owners; –
Emirates ID or passport copy for all Beneficial Owners; and –
Emirates ID or passport copy for all shareholders/partners.
|For any real estate transaction, with Natural Persons(buyer/seller)||Valid Emirates ID and Passport Copy|
How long such records obtained be maintained?
All the records pertaining to the real estate transactions coming under the purview of circular no. 05/2022 – Real Estate Activity Reporting should be maintained for a minimum period of 5 years.
Additional Reporting Requirements
It is important to note that filing of REAR to report the transaction pertaining to freehold property is an additional requirement. Such submissions does not exempt you from your existing obligations to submit the following types of reports via go AML:
- Suspicious Transaction Report (STR);
- Suspicious Activity Report (SAR);
- Funds Freeze Report (FFR);
- Partial Name Match Report (PNMR);
- High Risk Country Report (HRC); and
- High Risk Country Activity Report (HRCA).
What we can do for you?
As mandated by the UAE authorities, all real estate brokers and law firms should have a policy in place to identify such transactions as stipulated by the circular to ensure timely reporting. We can help you to understand this new reporting requirement, guide you to identify such transactions and establish a process to ensure the compliance of the same by filing timely reports.