Licence required to provide services of a property broker or a real estate agent
A new legal notice regulating the licensing of property brokers and real estate agents in Malta was enacted on the 3rd of July, 2020. The following article gives an overview of the most important provisions under this Act.
PRECISELY DEFINES THE DIFFERENT ROLES INVOLVED
The new Act defines the activity of a property broker or real estate agent as:
“An intermediary in the process of negotiating and arranging transactions involving the acquiring or disposing or leasing of land, including when the said activity is carried out through the engagement or the employment of a branch manager or a property consultant or both.”
Moreover, the Act gives clear definitions for the most common roles of people working as intermediaries in the real estate industry. These definitions finally clarify the duties and responsibilities of the various jobs, as well as set out the qualifications necessary to legally occupy a given role.
The Act provides definitions for the following roles:
Real Estate Agent
A natural person who has a licence to act as an intermediary in the process of negotiating and arranging the sale or lease of immovable property or land; and who employs branch managers or property consultants.
A natural person holding a licence who is employed to supervise any property consultant.
A natural person who has a licence to act as an intermediary in the process of negotiating and arranging the sale or lease of immovable property or land; and who is employed by a real estate agent and acts under the direction of a branch manager.
A natural person who has a licence to act as an intermediary in the process of negotiating and arranging the sale or lease of immovable property or land; and does not employ any branch managers or property consultants.
SETS OUT THE ELIGIBILITY CRITERIA FOR OBTAINING A LICENCE
For property brokers, real estate agents and branch managers:
To obtain a licence to act as a property broker, real estate agent or branch manager in Malta, one must fulfil the following conditions:
• Be 18 years or older
• Hold a certificate in real estate from a training institution at a minimum of 12 ECTS (MQF level 4), or equivalent
For property consultants:
• Be 18 years or older
• Hold a certificate in real estate from a training institution at a minimum of 8 ECTS (MQF level 4), or equivalent
Even if a person satisfies the conditions listed above, they may not apply or obtain a licence under the Act if they are:
• bankrupt and do not have an order of discharge
• the order of discharge is suspended
• the applicant’s conduct, repute, and financial position doesn’t make them fit to carry out the activity
No person shall carry on the activity of a property broker or real estate agent or be employed or engaged as a branch manager or property consultant after the 31st December, 2021 unless they hold a licence issued under the Act.
DESCRIBES THE PROCESS FOR APPLYING FOR A LICENCE
Any person who wishes to obtain a license under this Act may submit an application to the Board in the prescribed form. The applications are required to state the place(s) of activity where they intend to carry out their work.
Real estate agents who intend to carry out their activity through a partnership shall submit an application to the Board in a separate form.
There shall be no changes in beneficial ownership, in the board of directors or partners of a partnership, unless the Board is notified about the change and approves it.
LICENCE NOT REQUIRED FOR OCCASIONAL WORK
The Act also states that no licence shall be required should a person act as an intermediary in real estate transactions: “on an occasional basis, and does neither advertise services nor do they employ or engage anyone to assist in the carrying out of the said occasional activity.”
For the purposes of this Act, working on an “occasional basis” is taken to mean as being involved in no more than two transactions each year.
REGULATES THE EXPIRATION AND RENEWAL OF LICENCES
A licence shall remain valid for five (5) years from the date of issue, unless it is cancelled sooner, and it shall have to be renewed after expiration unless there are legal grounds not to renew it as provided under the Act.
MAKES IT MANDATORY FOR LICENSEES TO INFORM CLIENTS ABOUT SERVICE FEES
Licensees must inform their clients about the fees to be charged for their services in advance.
The Act also clarifies that if a transaction is not completed; the licensees shall still be entitled to fair compensation for their work as determined by a court.
Any person who does not comply with requirements in this Act shall be liable to an administrative fine of EUR 20,000.