Proposed law introduces €20,000 fine for unlicensed estate agents

New rules to license estate agents

A white paper for the creation of a property code and new rules for the real estate industry will introduce licensing and a code of ethics for realtors.

There are, at present, no set rules governing the establishment of estate agents, something the parliamentary secretariat for competitiveness claims is impacting property sales negatively.

A new law will regulate agencies and property consultants and introduce a €20,000 fine and six-month prison term for people who work as estate agents without a licence.

Village brokers, known as 'sensara', are exempt from the proposed regulations as long as they retain a basic 2% commission, conduct "occasional sales" and do not advertise their services. But licensed agents will be able to raise their interest rates above the 5% ceiling, as long as it is underwritten by a contract between agent and seller.

"It is vital that estate agency professionals stay aware of the market and satisfy their customers," parliamentary secretary José Herrera said in his presentation to a packed hall at the Casino Maltese in Valletta, where some 200 agents were in attendance. "The regulation will ensure that no Tom, Dick and Harry can waltz into the industry and pose as a real estate agent."

The law will now be set out for public consultation for a Bill to be debated in parliament.

New property agents will have to undergo a training course to recieve a license only after a two-year probation period. All licenses are to be vetted by a new real estate agents authority.

Apart from administering the licensing regime, thenew authority will set feels and levies, enforce the code of theics, investigation allegations and irregular practices, and follow up complaints by consumers.

A new administrative review tribunal will be set up to hear appeals on decisions by the authority.

Agents wil also have to be in line with money laundering rules, offer impartial advice and explain clearly all terms of business, as well as record all offers received and pass a written copy of the offer promptly to the seller.