What are the duties of real estate agents towards customers?
Fernando Batista, new president of the Institute of Public Real Estate and Construction Markets (IMPIC), recently announced, in an interview with idealista/news, that by the end of 2021 the Real Estate Mediation Law (Law 15/2013 of February 8) will be subject to review. It is therefore opportune to recall the current responsibilities of real estate agencies towards their clients, in order to understand how important it is to work with real estate agents that are duly authorized and registered with the regulatory authority of the real estate sector.
The current legislation in force, the already mentioned Law 15/2013 of February 8, defines the real estate brokerage activity as the search, by companies, on behalf of their clients, of recipients for carrying out business aimed at the constitution or acquisition of real rights over immovable property (such as, for example, the right of ownership over a property), as well as the exchange, transfer, leasing or assignment of positions in contracts whose object is immovable property (in the scope of a contract- promise of purchase and sale, for example), explains Belzuz Advogados.
The real estate brokerage activity is based on the development of the following actions:
- Prospecting and gathering information aimed at finding the real estate intended by customers (customers being considered as the person or entity that enters into a contract with a company qualified under the terms of the law for the provision of real estate brokerage services);
- Promotion of the real estate on which clients intend to carry out legal transactions, namely through their disclosure or publicity, or by holding auctions.
The real estate brokerage activity can only be carried out in the national territory by real estate brokerage companies and under contract, the IMPIC being the regulatory entity that oversees the construction and real estate sector, supervising and regulating the activities carried out.
Thus, whoever intends to carry out the activity of real estate brokerage must previously instruct, with the services of IMPIC, a request for licensing, and must:
- Possess commercial suitability;
- Be the holder of civil liability insurance, financial guarantee or equivalent instrument that replaces it.
After submitting the application, granting a license depends on proving the requirements for entering the activity and payment of the respective fees. The licenses granted by IMPIC and the identification cards issued by it have unlimited validity in time, without prejudice to the expiry of the licenses due to non-compliance with the required requirements, and their suspension or cancellation, the license issued being non-transferable, in any capacity and for any reason. It is made.
The responsibility of real estate agents is…
Real estate agents are obliged to fulfill various duties towards their clients, namely:
- Make sure that, when signing the mediation contract, their clients have the capacity and legitimacy to contract in the businesses that will be promoted;
- Ensure the correspondence between the characteristics of the property object of the mediation contract and those provided by customers;
- Propose to the recipients the business it is entrusted with, using the greatest accuracy and clarity regarding the characteristics, price and payment terms of the property in question, so as not to mislead them;
- Communicate immediately to the recipients any fact that may jeopardize the completion of the targeted business.
Failure to comply with the aforementioned duties may result in the intermediary’s obligation to reimburse its customers under the terms of the contractual civil liability regime, without prejudice to the possibility of sanctions being applied by the regulatory authority, such as, for example, a fine of 2,500 to 25,000 euros, prohibition of exercise of the activity or until the closure of establishments.
Finally, real estate companies are responsible for administrative offenses when the facts have been committed by members of their corporate bodies, representatives, agents or collaborators, in the exercise of their respective functions.
In order to guarantee liability arising from their activity, real estate brokerage companies established in the national territory must hold civil liability insurance, for a minimum amount of 150,000 euros, and this insurance must comply with the minimum conditions established by law.
*Ricardo Pires Jordão, Real Estate Law department at Belzuz Advogados – Branch in Portugal.