Managing other people's property — or leasing it in order to sublet it — is a separate licensed profession, and Law No. 2 of 2003 requires an office to lodge a bank guarantee of five million dirhams in favour of the Department of Economic Development. The guarantee serves exactly one purpose: settling amounts awarded by the rent tribunal. We read the text article by article — including the fact that the tribunal it relies on was replaced by the Rent Disputes Settlement Centre in 2013.
Verified against official sources on 2026-09-16: the text of Law No. 2 of 2003 comes from the Dubai Legislation Portal (dlp.dubai.gov.ae), the copyright line naming the Supreme Legislation Committee of the Emirate. The portal notes that the English version is a translation and that the Arabic text prevails in case of conflict. Every amount below is quoted as printed in the 2003 text; we did not verify the consolidated version or later amendments. This is not legal advice.
An owner handing a flat over "for management" rarely asks on what basis the manager is entitled to do it at all. In Dubai that occupation has a law of its own — and it carries a figure that explains why such companies are not numerous.
The document is Law No. (2) of 2003 Concerning the Profession of Renting and Leasing out Real Property in the Emirate of Dubai, issued by the Ruler of Dubai on 24 February 2003 (23 Thu al-Hijjah 1423 A.H.) and, unlike most acts, stating its commencement expressly: 1 March 2003 (Article 13). The preamble names the federal Civil Code No. 5 of 1985 and its amendments, Law No. 1 of 1992 establishing the Department of Economic Development, and Decree No. 2 of 1993 establishing the Special Tribunal to Determine Disputes between Landlords and Tenants.
What the law calls "the Profession"
"Profession: Managing the real property of others or taking lease of such real property for the purpose of subletting it." — Law No. (2) of 2003, Article 1
The definition is wider than it looks. It captures not only the classic management company but the "lease wholesale, sublet retail" model too: subletting for income is named as the profession expressly, alongside management.
Article 2 is blunt: no person may practise the profession in the Emirate without a licence from the Department of Economic Development.
Five million at the door
Article 3 is the heart of the law. In addition to the usual licensing requirements, an applicant for a licence to establish an office must lodge a bank guarantee in favour of the Department:
| Condition of the guarantee under the 2003 text | As printed |
|---|---|
| amount | AED 5,000,000 |
| term | one year, automatically renewable throughout the validity of the licence and for one year after its expiry |
| nature | unconditional, irrevocable and encashable in part by the Department |
| after a licence is revoked | released no earlier than six months from the revocation date |
⚠️ These are the conditions of the 2003 text, not a licensing regime we have confirmed as current. We did not verify later amendments; a portal search returned no amending act, but a search that finds nothing is not proof that nothing exists.
The guarantee is narrow: rent tribunal awards only
The most important thing about the guarantee is not its size but the boundary of its use. Article 4:
"The bank guarantee referred to in the preceding Article will be used only to settle any amounts adjudged against the provider of the guarantee by the Tribunal. It may not be used to settle any other claim even if a court judgement is rendered in respect thereof." — Law No. (2) of 2003, Article 4
So the guarantee is not a general cushion for everyone harmed by a manager. It is an instrument addressed to rent disputes, and the law cuts every other claim away from it in a single sentence.
Article 5 entitles the tribunal, at any stage of a rent action, to deduct from the guarantee an amount equal to the claim, the fees and the costs; the tribunal notifies the Department, and the Department must make the deduction. Article 6 adds enforcement of a judgement bearing the executory formula: the Department settles the award out of the debtor's guarantee, and the debtor must reinstate the guarantee to the statutory amount within 15 days of being notified. If they do not, the Department ceases processing all their applications and notifies the Dubai Municipality, the Ministry of Labour and the General Directorate of Naturalisation and Residency. The Department may grant a further 15 days; after that, the establishment through which the person practises is closed down.
Who does not need the guarantee
The law names three exemptions, all tied to capital or to ownership:
- public joint stock companies engaged in real property business in the Emirate are exempt (Article 8(1));
- private joint stock companies in real property whose capital is not less than AED 5,000,000 (Article 8(2));
- a natural person may be licensed to open an office to lease out and manage property owned by themselves or by relatives up to the second degree without any guarantee, provided the value of that property is not less than AED 8,000,000 — and their own and their family's private residences are not counted towards that value (Article 9).
The third exemption answers a frequent question from owners with a portfolio: you may run your own and your family's property through your own office, but the law still sets an entry threshold — expressed not as a guarantee but as portfolio value.
The penalty
Article 11: without prejudice to any stricter penalty under another law, a violation is punishable by imprisonment, a fine not exceeding AED 500,000, or both. That is the ceiling in the 2003 text, not the price of a particular breach: the law contains no "violation → amount" mapping.
Those already practising on the commencement date were given two months by Article 10 to comply.
The body the mechanism rests on has been replaced
And here is why this law is worth reading today alongside the others. Its "Tribunal" is, under Article 1, the Special Tribunal to Determine Disputes between Landlords and Tenants established by Decree No. 2 of 1993. It is that body which Articles 5 and 6 empower to reach into the bank guarantee.
We have already covered Decree No. 26 of 2013 on the Rent Disputes Settlement Centre: its Article 29 replaces Decree No. 2 of 1993, and Article 28 transfers to the Centre all cases pending before the former tribunal. In other words, the body named in the 2003 definition no longer operates as a separate institution.
⚠️ What does not follow: that the guarantee mechanism stopped working. Whether the 2003 reference is automatically redirected to the Centre is a question for the consolidated text and for succession instruments we have not read. We assert exactly the fact: the definition rests on a decree replaced in 2013, and who enforces against the guarantee today must be checked at source, not in this text.
Where the line with a broker licence runs
Management and subletting are not the same thing as brokerage of a transaction. Brokers have their own layer of rules: the register and licence under Bylaw No. 85 of 2006, and an individual is checked through the Trakheesi permit. Law No. 2 of 2003 says nothing about brokers at all — it is about those who manage your property or sublet it.
What we do NOT claim here
- That the amounts and conditions apply today as printed. We quote the 2003 text with a direct link to the source. A portal search produced no amending act, but that is not proof that none exists.
- That the law applies to a given company or model. Whether a specific activity falls within the definition is a question for the Department and for the company's documents.
- The licensing procedure, the list of documents and the fees. The law does not contain them: Article 12 assigns implementing resolutions to the Department's Director General, and we have not read them.
- How the guarantee mechanism is enforced today. The definition rests on the tribunal of Decree No. 2 of 1993, replaced by Decree No. 26 of 2013; we have not seen any redirection instrument.
- The relationship with federal company legislation. "Public" and "private joint stock company" are named as in the 2003 text; we did not verify how they are regulated now.
Sources
- Law No. (2) of 2003 Concerning the Profession of Renting and Leasing out Real Property in the Emirate of Dubai — Dubai Legislation Portal: issue by the Ruler of Dubai on 24 February 2003, corresponding to 23 Thu al-Hijjah 1423 A.H., with commencement on 1 March 2003 (Article 13); the preamble naming the federal Civil Code No. 5 of 1985, Law No. 1 of 1992 establishing the Department of Economic Development and Decree No. 2 of 1993 establishing the Special Tribunal; definitions of the profession as managing others' property or leasing it to sublet, and of the Tribunal as the body of Decree No. 2 of 1993 (Article 1); the bar on practising without a Department licence (Article 2); a bank guarantee in favour of the Department of AED 5,000,000, valid for one year and automatically renewable, unconditional, irrevocable, encashable in part, released no earlier than six months after revocation of the licence (Article 3); use of the guarantee only for amounts adjudged by the Tribunal and the bar on settling any other claim even under a court judgement (Article 4); the Tribunal's right at any stage to deduct the claim, fees and costs and the Department's duty to execute the deduction (Article 5); settlement of an award bearing the executory formula, reinstatement of the guarantee within 15 days, cessation of processing of applications and notification of the Municipality, the Ministry of Labour and the naturalisation directorate, a further 15 days and closure of the establishment (Article 6); Tribunal fees under Law No. 1 of 1994 on court fees (Article 7); exemption of public joint stock companies and of private joint stock companies with capital of at least AED 5,000,000 (Article 8); a licence to a natural person without a guarantee for property owned by them or relatives up to the second degree worth at least AED 8,000,000, excluding private residences (Article 9); a two-month transitional period (Article 10); punishment by imprisonment, a fine of up to AED 500,000 or both (Article 11); implementing resolutions assigned to the Department's Director General (Article 12).
- Decree No. (26) of 2013 Concerning the Rent Disputes Settlement Centre in the Emirate of Dubai — Dubai Legislation Portal: replacement of Decree No. 2 of 1993 on the Special Tribunal (Article 29) and transfer to the Centre of cases pending before the former tribunal (Article 28).
