The activity of real estate brokerage consists in the search, by the real estate brokerage companies, on behalf of their clients, for business of buying and selling real estate, as well as swapping, transferring, leasing or assigning the contractual position of a property. The activity may also include, for example, prospecting and gathering information to find the properties desired by customers.
Knowing the rules of the activity, as well as the duties and conduct of real estate agents, can avoid mistakes when making a deal.
What is in a real estate contract
The real estate mediation contract must always be concluded in writing and mention several elements:
• identification of the characteristics of the property, specifying all liens and charges (liens or mortgages, for example);
• business identification (purchase and sale or lease, for example);
• the company´s remuneration conditions, in fixed or percentage terms, as well as the form of payment, indicating the applicable VAT rate;
• identification of civil liability insurance or financial guarantee or equivalent instrument with indication of the policy and insurance entity or, when applicable, of guaranteed capital;
• identification of the real estate collector who, eventually, collaborated in the preparation of the contract;
• itemized identification of any ancillary services to be provided by the company;
• reference to the exclusivity regime, when agreed between the parties, with specification of the respective effects, both for the company and the client.
If the term of the contract is not mentioned in it, it is considered that it was concluded for a period of six months.
Mediators can submit contracts with general contractual clauses, provided they have been previously approved by the Institute of Public Markets, Real Estate and Construction (IMPIC).
The consumer must read the contract carefully and, if he wishes, he can ask the mediator for any clarifications he deems convenient.
Real estate agents are subject to supervision
In order to exercise the activity, real estate mediation companies always depend on the issue of a license by the IMPIC, which is also responsible for the supervision and inspection of the activity.
To obtain the license, several requirements are required. For example: having commercial integrity, that is, mediators cannot have been declared insolvent, and legal representatives cannot have been sentenced to an effective prison sentence, for example, for fraud or forgery of documents or money laundering. Licenses have unlimited validity, but may expire in some situations, such as in the event of a lack of good repute.
Legitimacy of the business must be verified
When signing the contract, the mediator must make sure that the clients have the capacity and legitimacy to contract the business that they will promote. You must also ensure that the characteristics of the property correspond to those given by customers.
The real estate company must not mislead the recipients of the business as to the characteristics, price and payment conditions of the property. If there is any fact that compromises the business, the real estate agent must immediately inform the recipients (buyers or sellers, for example).
Taking into account the interests in question, the law obliges real estate agents to have civil liability insurance that guarantees their activity, in the minimum amount of 150 thousand euros. The insurance must compensate the property damage caused to third parties caused by representatives and employees of the real estate company.
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