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) 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
FCA, CAMS, CISA, CS, DISA (ICAI), FAFP (ICAI)
Pathik is a Chartered Accountant with more than 25 years of experience in compliance management, Anti-Money Laundering, tax consultancy, risk management, accounting, system audits, IT consultancy, and digital marketing.
He has extensive knowledge of local and international Anti-Money Laundering rules and regulations. He helps companies with end-to-end AML compliance services, from understanding the AML business-specific risk to implementing the robust AML Compliance framework.