Bahrain RERA Broker Exam key terms

An official authorisation issued by the regulator allowing a person to carry out brokerage activities in Bahrain. It is granted after the applicant meets qualification, experience and fitness requirements, and it must be renewed and can be cancelled.

The process by which a broker applies to extend an existing licence before it lapses, usually by submitting updated documents, paying fees and confirming continued compliance with qualification and conduct requirements.

The removal of a broker's authorisation by the regulator, either at the broker's request or as a disciplinary measure for serious breaches. The broker must then stop regulated activity and settle client obligations.

An assessment of whether a licence applicant or holder is honest, financially sound and competent. Regulators review criminal records, prior regulatory sanctions, qualifications and business conduct before granting or renewing a licence.

The process of disguising the origin of money obtained from crime so it appears legitimate. It typically involves placement, layering and integration, and real estate transactions are a recognised channel for it.

Providing or collecting funds, directly or indirectly, with the intention that they be used to carry out terrorist acts or support terrorist organisations, regardless of whether the funds come from lawful sources.

The steps a broker takes to identify and verify clients, understand the purpose of a transaction and assess risk before and during a business relationship. It includes checking identity documents and beneficial ownership.

Additional scrutiny applied to higher-risk clients or transactions, such as politically exposed persons or complex offshore structures. It involves deeper source-of-funds checks and more frequent monitoring and approval.

The natural person who ultimately owns or controls a legal entity or arrangement, or on whose behalf a transaction is conducted. Brokers must identify beneficial owners rather than relying only on company names.

A person entrusted with a prominent public function, or a close associate or family member of such a person. Their involvement in a deal triggers enhanced due diligence because of heightened corruption risk.

A confidential report filed with the national financial intelligence unit when a broker knows, suspects or has reasonable grounds to suspect that funds are linked to crime or terrorism. Filing it is protected by law.

Disclosing to a client or any other person that a suspicious transaction report has been or may be filed. This is prohibited because it can undermine investigations and is itself a punishable offence.

The obligation to retain client identification records, transaction documents and correspondence for the period set by law. Records must be available to regulators and must support audit and investigation.

The legal obligation of a broker to act in the client's best interests, putting the client's interests ahead of personal gain. It covers loyalty, confidentiality, disclosure of conflicts and prudent handling of client money.

A situation where a broker's personal, financial or family interest could improperly influence professional judgement, such as acting for both buyer and seller. It must be disclosed and managed or avoided.

The duty to give clients complete and accurate information about the property, the transaction, fees, and any matter that could affect their decision, including known defects and the broker's own interest in a deal.

Making a false or misleading statement, or omitting material facts, that induces a client to enter a transaction. It can lead to civil liability, disciplinary sanctions and loss of licence.

Funds held by a broker on behalf of clients, such as deposits or reservation fees. It must be kept separate from the broker's own money and handled through proper accounts to prevent misuse or loss.

Insurance that covers a broker against claims from clients for losses caused by negligent advice, errors or omissions in professional work. Proof of cover is usually a condition of licensing.

Failure by a broker to exercise the standard of care and skill reasonably expected in the profession, causing loss to a client. It may give rise to civil claims and regulatory action.

Measures taken by the regulator against a licensee who breaches rules, ranging from warnings and fines to suspension or cancellation of the licence. It aims to deter misconduct and protect the public.

The sale of a property before it is completed or sometimes before construction begins, based on plans and specifications. Such sales are tightly regulated to protect buyers from project failure.

The requirement for a developer to be licensed and entered on the regulator's register before marketing or selling units off-plan. Registration confirms the developer's legal standing and project approvals.

An approval granted for a specific development project, confirming that plans, land title and construction permissions are in order. Off-plan sales may not be marketed or contracted without it.

A dedicated bank account, controlled by an approved escrow agent, into which buyers' off-plan payments are deposited and from which funds are released only against verified construction milestones.

An approved institution or entity that holds and administers escrow funds, ensuring withdrawals match documented project progress and that buyers' money is not diverted to unrelated uses.

A defined stage of building work, such as completion of foundations or structure, that must be certified before escrow funds are released. It links payments to real progress on site.

A financial guarantee provided by a developer or contractor to secure performance or protect buyers' funds in an off-plan project. The bond can be called on if the developer defaults.

A person authorised to market and sell property on behalf of a developer or broker. Agents must be registered, work under a licensed entity and follow the same conduct and anti-money-laundering rules.

A professional who operates and maintains real estate on behalf of owners, handling leases, service charges, maintenance and tenant relations under a management agreement and applicable rules.

A qualified professional who estimates the market value of property using recognised methods and evidence. Valuations must be independent, documented and free from pressure by interested parties.

A body formed by the owners of units in a jointly owned building or development to manage shared property, collect service charges and make decisions on maintenance and improvements.

Parts of a building or development available for shared use by all owners, such as lobbies, lifts, corridors, gardens and roofs. They are managed collectively and funded through service charges.

A form of ownership where a person holds title to an individual unit within a larger building and shares ownership of common property with other unit owners. It enables separate sale of units.

A periodic payment collected from unit owners to cover the cost of managing, maintaining and insuring common areas. Budgets and accounts should be transparent and shared with owners.

Ongoing training that licensees must complete to keep their knowledge current and maintain their licence. It typically covers legal updates, ethics and anti-money-laundering requirements.

The collection of laws, regulations, codes and guidance that govern real estate activity in Bahrain, setting out licensing, conduct, reporting and enforcement requirements for all market participants.