On the third July of 2020, a new Act was enacted with one sole purpose: the licencing of real estate agents, property brokers and property consultants. Failure to adhere to the new rules will imply a penalty twenty thousand euro (€20,000) applicable as from 1st January 2022.
The law regulates professionals in the process of negotiating and arranging transactions involving the:
Any of the above activities which are carried out through the engagement or the employment of a branch manager (i.e. a person who is engaged to supervise a property consultant) or a property consultant (i.e. a person who is employed or engaged by an estate agent as an intermediary and who acts under the directions of the same or those of a branch manager) or both, shall be covered as well. The only exception as to when the licence shall not be needed is when the following cumulative criteria are satisfied:
a) a person carries out the negotiation and arrangement of the above-mentioned transactions not more than twice yearly;
b) s/he does not advertise his/her services; and
c) s/he does not employ nor engage anyone to assist him
Notably, where a real estate agent intends to carry out his activity with some other person, s/he shall as per the new law be obliged to form a partnership/company/any other legal entity, which needs to receive authorisation from the Licensing Board prior to the commencement of the activity.
The eligibility criteria to act as a property broker or real estate agent or a branch manager shall be the following two criteria:
a) The individual applying for the licence must have attained the age of 18 or has been emancipated to trade in accordance with the law and
b) The individual must have obtained a relevant qualification as prescribed by law.
The eligibility criteria to act as a property consultant shall be almost the same, with the sole difference being that the level the certificate in real estate needs to have This means that the associated workload to achieve the qualification shall be less stringent.
Notwithstanding the eligibility criteria, the following characteristics shall at all times disqualify an individual from applying for a licence:
a) The individual is bankrupt and has not obtained his order of discharge, or, if he has obtained his order of discharge, it is suspended for a term not yet expired or is subject to conditions not yet fulfilled; or
b) having regard to the applicant’s conduct and repute, his financial position, and to the interests of the public, the applicant is not fit and proper person to carry on the activity of property broker or real estate agent or act as branch manager
Moreover, in order to apply for a licence, an application form needs to be filled in and submitted to the Licencing Board.
Other significant considerations which need to be noted are the following:
a) The licencee contravenes any provision of the newly enacted law or no longer meets the requirements mentioned under it
b) where any beneficial owner, member of the board of directors or partner of the entity formed is no longer considered as fit and proper
c) Where the legal entity formed to carry out the business is dissolved and consequently wound up
Please get in touch with our Head of Legal, Dr Josef Cachia, on email@example.com or our Legal Advisor, Dr John Caruana, on firstname.lastname@example.org, should you require any assistance in this regard or any further clarifications. We shall keep you updated with all the latest developments in this sector and shall grant you all the aid required to apply for this licence.Go Back
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