Will real estate brokers finally become regulated?

So far, the real estate agency business in the Czech Republic has been entirely unregulated, but this may change from 2019.

The Ministry for Regional Development (Ministry) has prepared a bill for a Real Estate Brokers Act, which was headed for the inter-departmental commenting procedure. An earlier draft bill by the Ministry was shot down by the government’s legislative council, which recommended that the ministry thoroughly rework the proposal.

The principal objective of the new draft bill is to improve protection of clients and service quality. More specifically, the Real Estate Brokers Act envisions setting specific rules for doing business in the real estate brokerage sector, whereas the Ministry intends real estate brokerage to become what is known as a qualified trade. This would mean that brokers would have to satisfy certain standards in terms of their professional qualifications. The Ministry also plans to create a public list of recognized real estate brokers. On the whole, these tools ought to result in more stringent oversight over the industry and bring down the number of black sheep.

Aside from setting requirements which must be satisfied by anyone wishing to work as a real estate broker, the new act should also set forth more detailed rules regarding agreements to provide real estate brokerage services. Aside from defining the required contents of such an agreement and mandating written form, the Real Estate Brokers Act is also expected to describe the various options for terminating a brokerage agreement and the circumstances under which a broker becomes entitled to their commission fee. Brokers may face new obligations in connection with execution of a brokerage agreement, i.e., in particular, information duties towards their customer.

That said, the draft bill for the Real Estate Brokers Act still has a long way to go, with numerous legislative waystations along the road to being written into law. We must wait and see whether ‒ and if so when ‒ brokerage services in the real estate market will finally become regulated. The Ministry, for its own part, considers it likely that the new law will come into force as soon as early 2019.

Source: https://apps.odok.cz/veklep-detail?pid=KORNA99EGASI



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