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What will the regulation of real estate brokers bring?

Increasingly, we are encountering more and more often in real estate transfers with binding conditions, which are often advantageous especially for the real estate broker.

Jak vymezit nemovitost v kupní smlouvě
3 minutes of reading

A developer or real estate agent often puts a person in front of a finished thing, does not negotiate with him at all and does not make buying an apartment any easier. The buyer, who otherwise proudly protects his rights against the electronics trade and does not trust anything he does not measure, suddenly stands with his hat in his hand and just nods at the real estate agent’s demands. He does not hesitate to rely on him fully and sign all the documents he presents to him. He treats the real estate agent and the property as a necessary evil. He can already see himself barbecuing on the terrace of his new apartment and wants to get the legal “paperwork” over with quickly and painlessly. He doesn’t really care and relies on the broker, whom he sees as a real estate “expert”.

The new regulation

The state’s efforts to vet these “experts” with a new law and to regulate the conditions of real estate brokerage for the first time can therefore be appreciated. After all, this should have been done a long time ago. The fact that rules are necessary has been proven again and again for many years. Practically anyone can do real estate business in the Czech Republic today, and a nice business card with the inscription “real estate agent” means absolutely nothing. This is also reflected in the fluctuating quality of real estate mediation and the high number of real estate brokers. There are more than 15 000 of them in the Czech Republic, the highest number per capita in the entire European Union.

The Ministry even chooses rather strong words in its explanatory memorandum:

“A significant part of real estate intermediaries does not meet the expectations of consumers, when the activities of these real estate intermediaries are aimed primarily at quickly securing their own brokerage commission, regardless of whether or not the real estate transaction is realized, or regardless of the quality of real estate intermediation.”

Real Estate Purchase or Sale

We provide a complete package of legal services related to real estate sales and purchases, including reservation contracts and escrow services. We will also help you with all tax and land registry issues. Our work is fast and accurate, ensuring a worry-free transaction. You’re also welcome to pay after services are provided.

Therefore, the new law introduces mandatory liability insurance or education or experience requirements for brokers. Real estate brokerage should no longer be a free trade, which can be practically practiced by anyone, but a bound trade. Thus, only graduates of university degrees in law or economics or graduates of other disciplines with certain experience will be allowed to be real estate brokers. Those who do not have a high school diploma will not be able to think about real estate brokerage at all. The bill also envisages heavy fines for brokers. For example, if a broker fails to take out compulsory insurance, he or she faces a fine of CZK 1 million.

Regulation is not enough

However, the new regulation does not and cannot address the imbalance in the relationship between the seller, broker and buyer. If a person continues to approach the choice of vegetables in a supermarket or beer from a microbrewery with more care than the purchase of an apartment in which he wants to spend the rest of his life, the regulation of brokers will not bring him much. The law will not read and check the contract for a person. In particular, a person who wants to buy a flat should realise that the estate agent is not working for him, that he has a different interest. And make arrangements accordingly…

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Author of the article

JUDr. Ondřej Preuss, Ph.D.

Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.

Education
  • Law, Ph.D, Pf UK in Prague
  • Law, L’université Nancy-II, Nancy
  • Law, Master’s degree (Mgr.), Pf UK in Prague
  • International Territorial Studies (Bc.), FSV UK in Prague

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