Soon, not everyone will be able to become a Czech realtor
However, as Radio Prague notes, this freedom will soon come to an end – only those with appropriate education or special knowledge and experience will be able to become a broker. The Czech government has approved a draft amendment to the law that abolishes the "free" status for licenses for real estate brokerage services. Although the amendment still needs to be approved by parliament and signed by the president, the authorities have been planning to "tighten the screws" in this area for a long time, and this will inevitably happen soon.
"Under the new law, the business license will have a 'conditional' status, meaning we will insist that realtors have certain professional training – appropriate education and practice," explained Minister of Regional Development Klára Dostálová.
If the amendment is adopted, anyone wishing to become a broker will have to present a diploma of higher education in law, economics, finance, marketing, or construction. Another option is secondary education and three years of experience in real estate trading.
"Thanks to the law and new rules, this will no longer be a 'garage business.' Our goal is to streamline relations between clients and brokers and restore prestige to this field," emphasizes Klára Dostálová, who believes the law could be passed in early 2020.
"The Czech Republic is one of the few EU countries where real estate brokerage services are not regulated by a separate law, which of course leads to a number of unprofessionals operating in this market who lack sufficient skills. With our draft, we aim to protect consumer and citizen rights. The goal of the law is to raise the level of services provided," Klára Dostálová previously said in an interview with Czech Radio, having been working on the amendment for several years.
"Quality results should be more important than speed of work. As soon as the law reaches the deputies' desks, heated debate will begin. This could benefit it, but as we know, sometimes parliament's creativity can complicate the legislative process," believes Jan Borůvka, director of the Czech Association of Real Estate Agencies.
Klára Dostálová says her department constantly receives complaints about dishonest actions by realtors and real estate agencies: "The most common case is when a broker finds a private ad, poses as an interested buyer, photographs the property, and then, without the owner's consent, publishes their own ad and waits to see if they can find a client to act as an intermediary between the owner and the buyer, of course for a fee. Or a realtor brings a fake buyer to the owner, just to sign a brokerage contract with them."
The draft amendment provides for insurance for the intermediary in a real estate sale transaction for a minimum amount of 1 million 750 thousand crowns (68.5 thousand euros). If a realtor fails to do this, they will face a fine of one million crowns (about 40 thousand euros).
"The Ministry of Regional Development will publish a public register of real estate brokers so that every citizen can verify on our website that they are dealing with a professional they can trust," shares Klára Dostálová about her department's plans. However, it is not yet clear whether this proposal will be included in the final text of the law.
Martin Fojtík, director of Fincentrum Reality, believes that the draft amendment does not sufficiently take into account the situation on the real estate market. The rules are formulated too generally, making it very difficult to regulate the market. Moreover, Fojtík is confident that the innovation will raise prices for real estate services. Roman Vajser, commercial director of Bidli, is confident that the presented draft is still better than the current situation, although the law, in his opinion, still needs refinement.
Meanwhile, Robert Ganzel, CEO of Next Reality, believes the law could be even stricter. For example, in terms of qualification requirements, mandatory insurance, and conditions for storing transaction money at a real estate office. However, according to Minister Dostálová, the law should not discriminate against small and medium-sized entrepreneurs.
According to the Czech Statistical Office, at the end of last year, there were 14,602 legal entities registered in the Czech Republic that listed real estate brokerage services as their activity. In terms of population, the Czech Republic is among the European leaders in this indicator – there is one realtor for every 720 residents. Unofficial data are even more impressive: according to them, up to 25,000 such intermediaries operate in the country.