Legislators and the relevant authorities have found themselves at odds with the fact that the hundreds of negotiators swarming the streets to close business deals are not regulated by any code of ethics.
Maltese legislation fails to regulate or, better yet, provide a definition of what an estate agent is. The nature of the work exercised by such people classifies them as mandatories, acting on instructions from a client to introduce them to a buyer or seller and help in the negotiation for the successful transfer of property.
Apart from being tasked with bringing clients together, an estate agent is vital in the mediation process, satisfying the expectations of seller and buyer while keeping the market value of the property at the core of negotiations.
The purchase of a new home or any other immoveable property is a landmark event in anyone’s life. Therefore, it should be protected from amateurish practices.
The proposals laid out in the White Paper will change the real estate business dramatically, giving the profession the importance it is due and the value it is worth
The government has issued a White Paper concerning the regulation and promotion of real estate in Malta. The purpose of this document was to present, for consultation, the implementation of an institutional, regulatory and legal framework related to the various forms of property exchange.
This proposal is not only evidence of the government’s awareness that the interests of consumers are not protected enough solely by general consumer protection legislation, civil law provisions and jurisprudence, but is also a recognition of the growing importance this profession demands. Having identified the shortcomings in our system, the White Paper proposes:
1. The set-up of an Act to regulate real estate agencies, agents, and other entities carrying out a similar business.
2. A code of ethics covering conduct between agencies, as well as conduct with clients.
3. An organisation to coordinate the efforts of real estate agencies, agents, property consultants and property managers that promotes quality real estate.
4. Training programmes.
The proposed Act will bring about changes in the real estate industry. It will provide the much needed definition of a real estate agency and expressly outline the work carried out by agencies, giving their work legislative recognition.
In particular, the Act will serve as a game changer, mainly through the establishment of the Real Estate Agents Authority, which will provide for the administration of the licensing of estate agents, set rules, adopt an investigatory role in the acts of misconduct by licensees and initiate proceedings. This body will also hold training courses and examinations leading to a licence for applicants seeking to be recognised.
The authority will serve as the principal cornerstone upon which estate agents shall operate and abide by. It aims to inspire consumers’ faith in their capacity and ability, although we are yet to see if this will be at the cost of business productivity.
Although the vast majority of estate agents perform their work diligently and ethically, the White Paper will provide more consumer protection through new rules regulating the conduct of estate agents involved in the transfer of property, instilling additional obligations.
The White Paper also sets out to create a foundation, the principal purpose for the promotion of real estate in Malta and abroad. Through this foundation, international buyers will be given the necessary guidance and security during the transfer of property in Malta. However, its purpose is not confined to attracting foreign investment but also to provide direction towards new sustainable and innovative developments.
To obtain a licence, the applicant must undergo particular training. Such beckons the question as to what extent and how burdensome this training will be.
The White Paper proposes the implementation of specific educational requirements. Varying levels may be available to applicants, carrying with them a time for completion.
The proposals laid out in the White Paper will change the real estate business dramatically, giving the profession the importance it is due and the value it is worth.
Implementing the proposals will be a preparatory act for the European Professional Card (EPC), which will be introduced in member states by next year.
The attention directed towards the regulation of this profession has not only been local but has spread across Europe at a fast rate over the past decade. The White Paper has turned the heads of real estate agents to a laborious few months ahead, but it has also brought to the forefront the duties and responsibilities of a real estate agent.
Marc Agius Fernandez is legal adviser at Engel & Völkers Sara Grech.