New Regulation for Spanish Estate Agents
On 26 April, the Andalucian Parliament passed a new regulation in Law 1/2018 of April 26 which will affect management and real estate agencies in the region.
A public real estate agency Registry will be created and it will be compulsory for any professional in this sector, who wishes to start or continue practising this profession, to register.
The law will ensure compliance by implementing a sanctioning regime for those people who dedicate themselves to real estate activity and who do not register or fail to comply with the imposed obligations.
This Law defines to whom it will be applied, indicating that it will be to:
“Real estate agents or agencies who can be individuals or legal entities who provide mediation services, advice and management in real estate transactions, including purchase and sale operations, option of purchase, rental, exchange or transfer of real estate and the rights relating to such operations, including the constitution of guarantees”
Anybody involved in these transaction will be subject to the legal and disciplinary regime established in this law and its implementing regulations.
For registration in the public registry, the following requirements must be met:
- Have sufficient professional training that is established by the regulation.
- Have an establishment open to the public or a physical address in the case of provision of services electronically.
- Have civil liability insurance in place.
- Lack of criminal record, with the exceptions that are provided for by regulation.
- Constitution of a permanent guarantee to cover for the amounts that they receive in the exercise of their mediating activity.
Agents and real estate agencies will have to carry out their activity with the duty to inform interested parties of their rights and obligations related to the operation in which they intervene, and subscribe Terms of business with their clients.
They must, in addition, guarantee the return of the amounts that are delivered to them on account of the acquisition of houses or as a signal or deposit, according to contract.
The penalties for not complying with current regulations may amount to a maximum of 6,000 euros for very serious infractions.
Our Alex Radford´s comments in respect of the new regulation were:
“the legislation is welcome and overdue. Hopefully it will deliver a professional service from estate agent across the sector as malpractice from a few agents can affect the whole read estate industry which after years of decline is beginning to lift off again. There are many professional agencies in Andalucia but we also see some sharp practices from agents who for example request 10% upfront from a purchaser just to reserve a property. It is important that Spanish property purchasers instruct independent lawyers to act for them to protect their interests”
