A new law on real estate activities comes into force in the Czech Republic
As Radio Prague notes, a revolution is brewing in the Czech real estate market. The new law tightens requirements for professional brokers. To do business in the Czech Republic, they will have to provide proof of relevant specialization or convince an examination board of their knowledge, the authors of the amendment say.
What do realtors themselves think about this?
"In our opinion, the law has not achieved its goals. Let me give an example: a broker can be someone with a secondary education and 3 years of experience in the field, regardless of their actual knowledge," says Sonja Puchmertlova, press secretary of Next Reality, not hiding her dissatisfaction.
Another change concerns the handling of deposits. As is known, in the Czech Republic, not only notaries but also real estate agencies themselves can arrange deposits. The buyer deposits the agreed amount into an account, and after all conditions of the transaction are met—up to registration in the real estate cadastre—the realtor sends the funds to the seller's account.
However, practice has shown that some realtors freely disposed of their clients' funds transferred to the agency's account during the several weeks it took for the transfer of ownership from seller to buyer, Michal Hrnčíř from the law firm Vilímková, Dudák & Partners told Czech Radio. His words were also confirmed by the president of the Association of Real Estate Agencies, Jaroslav Novotný.
"This is essentially illegal. Realtors have no right to use the money transferred to the agency's account, as they are not the owners of these funds. Unfortunately, such cases have occurred."
According to the new rules, real estate agencies will be required to keep any money received from clients in separate deposit accounts.
"Real estate agencies hold not only millions in their accounts. More often, it is a deposit of one month's rent that realtors give to the tenant. This amount does not exceed 20-30 thousand crowns (about a thousand euros). Real estate agents also hold funds for payment of state stamp duties, etc.," explains Novotný.
All real estate agencies without exception must, from February, take out liability insurance for a minimum of 1,750,000 crowns (70 thousand euros). Contracts with clients must contain a detailed list of services provided to the client.
Preparation of the law began in 2011. Compliance with the new rules will be monitored by the Živnostenský úřad – the Trade Licensing Office, which in the Czech Republic issues business permits.