On 1 August 2020, the Law on the Activities of Real Estate Brokers (hereinafter referred to as the Law) entered into force, which intends to regulate the legal bases for the professional activities of real estate brokers and to ensure the supervision of their professional activities in order to prevent money laundering, the financing of terrorism and proliferation and to promote the provision of stable, secure and reliable brokerage services.
Meanwhile, at the meeting of 29 September this year, the Cabinet of Ministers approved the procedures for civil liability insurance for real estate brokers and the registration fee for the inclusion of a person in the register of real estate brokers.
The Law provides that a real estate brokers must insure the civil liability for their professional activity.
The “Rules of Insurance of Civil Liability of Real Estate Brokers for Professional Activity” approved by CM provide for the minimum annual liability limit for the insurance agreement and the minimum risks to be insured by the real estate broker.
The minimum annual liability limit for a civil liability insurance agreement of a real estate broker is set at 50,000 euro.
A civil liability insurance agreement may be individually concluded between one real estate broker (in the case of a natural person) and an insurer, or it may be collective (in the case of a legal person or partnership), including several real estate brokers at the same time.
The mandatory risks to be insured by a real estate broker are:
- the direct risk of financial losses related to direct financial expenses incurred as a result of acts or omissions of the real estate broker;
- the risk of third-party claim investigation, expert examination, legal aid and litigation expenses related to the expenses incurred in third-party claims;
- the risk of rescue costs related to the rescue costs arising from emergency measures to prevent or reduce the extent of damage caused to third parties.
At the same time, the Law provides that as of 1 July 2021, only persons included in the Register of Real Estate Brokers (hereinafter referred to as the Register) will be allowed to provide brokerage services. The register is publicly available on the website of the Ministry of Economics.
The approved CM Regulations Regarding the Registration Fee and Annual Supervision Fee of a Real Estate Broker provide that a real estate broker will have to pay an initial registration fee for the inclusion of a person in the register and the subsequent annual supervision fee of the real estate broker.
The registration fee for the inclusion of a person in the register of real estate brokers is set at 40 euro. The real estate brokers included in the register will continue to pay annual real estate broker supervision fee of 40 euro each year.
The collected registration fee is intended for the provision of the new functions of the Ministry of Economics, which are related to the registration of real estate brokers in the register, the maintenance of the register and the updating of information therein, as well as the supervision of real estate brokers.
As of 31 December 2018, 1612 agents or real estate brokers were under the supervision of the State Revenue Service.