Are there any regulations for real estate brokerage? Until recently, there were no formal regulations required of real estate agents in Spain.
Today the situation is changing in some areas. In this article, we explain what the new expectations will look like, how your local agent will be charged, and what it means for buyers and sellers.
Estate agents are one of the professional organizations trusted by people who want to buy or sell their property.
Since real estate is probably the largest financial transaction you will ever make, it is a huge responsibility, but only now have measures and regulations been put in place for estate agents to hold those responsible accountable for the work they do.
The approach to monitoring real estate agents is addressed at the regional level rather than at the national level.
Andalusia, the Canary Islands, Madrid and Murcia have already begun requesting registration, and now Valencia is joining them by creating their own Community Registry, covering the regions of Alicante, Valencia and Castellón.
Registering a business is just the beginning of new prospects. Estate agents are now also subject to a range of safeguards and requirements in addition to receiving formal training.
In the event of an incident or if simply things go wrong , their actions can also be tracked using electronic civil liability records.
Ultimately, they are professional bodies working for the public interest, so it is strange that procedures for monitoring their activities have not yet been implemented.
For established real estate agents with a proven track record and excellent referrals, this will bring a degree of comfort.
People can get into the business and make a lot of money from it easily. Most genuine dealers would be happy to remove the sheepskin and allow customers to be more discriminating about their choices.
What if they don’t comply?
As expected, strict penalties will be imposed, with rule violators facing fines ranging from €10,000 to €350,000, and possibly more for those who have committed a very serious crime. The new laws come in the form of a series of decrees published in 2022 and have only now entered into force.
The goal of the new regulations is to improve transparency among those who “broker, advise or manage real estate transactions.” It will help protect consumers, especially with regard to purchasing a home rather than a business, and will apply to all companies and individuals currently conducting regular sales in the Valencian Community.
Regulation of real estate agents, QUALIFICATIONS :
A real estate agent should be someone who can give a sound opinion and act.
Specially trained at university level in social and legal sciences, engineering or architecture or who have the necessary specialized training.
This professionally trained person must have completed at least 200 hours of instruction in real estate.
Trainers will have different training options: face-to-face, distance learning, online, or a combination of these methods.
For real estate agents of foreign origin, this creates a number of obstacles. If they do not have the required university degree, they will have to pursue an academic training program. This will help them obtain the necessary qualifications to continue practicing the profession.
It is not surprising that such training courses are now emerging to help those dedicated to this profession ensure that they can continue to carry out their activities legally.
In addition to completing additional training, real estate agents must also register themselves.
This applies to people who exercise “regularly”.
One definition includes being an intermediary in more than two purchases within the Valencian Community per year.
THE REQUIREMENTS :
Licensed real estate agents must have premises open to the public, unless their services are offered exclusively online.
Offices where business is conducted. These must have all the necessary open licenses and must also be registered for tax purposes.
If they operate their business online only, they must still have physical connections in the Valencian community.
So, for example, a Belgian, German or British real estate agency provides services in the Valencia region of Spain must have a physical address in the area.
Whether the company operates physically or online, consumer inquiries, complaints and complaints regarding the services provided must be taken care of. At least one person must meet specialized training requirements and that person may not manage more than three facilities.
Real estate agents must have insurance and service guarantees to cover damage and civil liability.
Real estate agents must protect deposits against the risk of the agent’s financial difficulties.
Liability insurance compensates for damages caused to clients due to professional errors or negligence.
As a customer, you can request to receive the policy number and name of the insurance company.
Real estate agents must adhere to a code of conduct and professional ethical standards. This also applies to price setting and commission procedures.
They will have to declare compliance with these requirements through the Valencian Registry.
Real Estate Agents Regulations: Registration
A standard compliance agency classifications will be set. However, if an agent is found to not meet the requirements, they will need to update their registration as details change.
Regulations related to real estate brokerage have a certain deadline. August 2023 has been set as the deadline for estate agents to comply with the new requirements.
It is expected that once the system is in place and established, it will give potential buyers and sellers greater confidence in the agents they trust with their properties.
You should definitely exclude negotiators with minimal qualifications or experience and no insurance.
Finally, it is important for owners to look for other referral sources specially before making the final decision on who will represent them.
Real estate agents should aim for regulation, oversight and accountability.
This is encouraging and welcome.
Regulation of estate agents is here to stay, however, there is still a long way to go before we can see the level of improvement this brings to the real estate market.
Oscar Paoli Abaco Advisors
