Can I buy directly from a developer in Lebanon and avoid the agent commission?

Also asked as: “Can I buy off-plan in Lebanon without an agent?” · “Do developers in Lebanon charge commission?” · “How do I avoid the 2.5% broker fee on a new project?” · “Buying a new apartment directly from the developer in Lebanon”

What the law says about the broker's fee#

Under the Commercial Code, brokerage is a contract: the broker, for a fee, guides you to a deal or acts as go-between in the negotiation^[2]. The fee is set by agreement or an official tariff, and only if neither exists by custom or a judge's estimate. We found no law that fixes a rate or says which side pays, and no official tariff for real-estate brokers.

The 2.5% you hear about is custom. JSK Real Estate, a Lebanese agency, wrote in October 2018 that the buyer pays 2.5% of the final price to the buyer's agent and the seller pays 2.5% to the seller's agent. The president of the brokers' syndicate REAL referred to the same 2.5% in December 2015^[3,4]. Both are brokers, and we found no source after 2019 on whether the rate has changed. More on who pays the broker in Lebanon.

Does going direct make the flat cheaper?#

Nobody has shown that it does. In a December 2015 Executive Magazine interview, the president of REAL argued that a buyer who skips the broker still pays the fee in effect, which he put at 2.5% (a broker's claim)^[4]. He also said a broker can get a better deal and better payment terms. That is the view of the brokers' own syndicate.

We also saw a claim that the fee can be avoided on new projects by going to the developer, but we could not open the article it came from, so it is not confirmed. We found no published source on whether developers lower the price for buyers who come without a broker, or whether they pay a broker on their own side. Ask the developer directly, and get the answer in writing in the offer or the promise of sale.

If a broker showed you the project first#

A broker earns the fee when the information he gave or the negotiation he ran leads to the contract^[2]. So if a broker introduced you to the project and you then went to the developer yourself, he may still claim a fee. Whether he is owed one depends on the facts and on what you agreed, so ask a lawyer before you refuse or pay. If the contract depends on a condition, the fee is due only once that condition is met, and expenses you agreed to repay are owed even if no deal is signed. See when the broker's commission becomes due.

A judge may reduce an agreed fee that is out of proportion to the deal and the work done^[2]. A broker loses the fee and his expenses if he works for the other side against his duties, or gets that side to promise him a fee in bad faith. See whether a court can reduce a broker's fee.

What buying direct does not change#

Without a broker, nobody else is checking the deal for you, and the developer's sales office works for the developer. The official records are what you can check yourself. A Land Registry extract shows the owner, mortgages and restrictions on the plot^[1,5]. According to Kallas Law Firm, every charge on the property's folio passes to you unless it is cleared before you buy^[1]. Use the extract to confirm the developer owns the land and has a permit, and check the developer itself.

Art. 5 of Decree 15874/2005, as amended by Decree 617/2007, appears to ban selling parts of a building that has no final occupancy permit, with an exception for units under Law 539/1996. We read this in the decree but could not match the exact wording^[6]. We also could not confirm whether the ban reaches a promise of sale on a flat not yet built, so ask a lawyer how it applies to the contract you are offered.