After more than two years of close collaboration between the Balearic Government, the Direction General of Housing and representatives of the Balearic real estate sector, the draft decree regulating the requirements to exercise the activity of a real estate agent and creating the Register of Real Estate Agents of the Balearic Islands has been published. The decree has received the unanimous approval and backing of the sector, is already published and is expected to be fully approved at the end of 2022 or beginning of 2023.
This Decree was created with the aim of protecting the rights of the consumer, establishing obligations of training, registration and responsibility for estate agents, while at the same time putting a stop to intrusion in the real estate sector in the Balearic Islands. The estate agent's clients will have much greater transparency and legal certainty. They will be able to easily check if their agent is officially registered and they will know that strict standards of training and good practice are met by estate agents.
The requirements to be able to practice as an estate agent in the Balearic Islands are clearly stated in the Decree, as well as the obligation to incorporate and permanently make public the number of the Register of Estate Agents of the Balearic Islands. Failure to display the registration number in such advertising will be considered clandestine activity, illegal offer, intrusion and unfair competition. This historical demand in favour of professionalism and guarantee for legal certainty in advice is finally resolved in favour of the consumer and transparency in the sector.
Press conference - from left to right: Mila González, President of the Associació d'Immobiliàries d'Eivissa (PIMEEF), Hans Lenz, President of the ABINI Real Estate Association and Managing Director of Engel & Völkers Mallorca Southwest, Conselleria de Vivienda y Transportes Josep Marí, President of the Colegio Balear de Agentes de la Propiedad Inmobiliaria, Natalia Bueno, General Director Housing and Architecture Cristina Ballester.
Among the novelties included in the Decree is the obligation for real estate agents to take out civil liability insurance. This insurance will cover damages and losses that may occur in the exercise of the activity. The minimum capital to be insured is €100,000 per claim and €600,000 per year. In addition, a surety insurance policy must be taken out with a guarantee of a minimum amount of €60,000.
To be registered in the Register of estate agents, you must have a university degree in social and legal sciences, engineering or architecture; a non-university education of at least 200 hours related to mediation, consultancy and management services, or have demonstrable experience in the provision of real estate services for at least four years immediately prior to the date of submission of the application.
Estate agents in the Balearic Islands must have an establishment open to the public or at least an accessible postal address where enquiries, complaints and claims from consumers and users regarding the services of estate agents must be dealt with. In the offices of estate agents, the sign and the registration number in the Register of Estate Agents of the Balearic Islands must be visibly displayed. In addition, in companies dedicated to real estate brokerage there must be one person as administrator or part of the board of directors and one person responsible for each establishment open to the public that complies with the requirements.
Engel & Völkers, a member of the real estate agency association ABINI, welcomes this decree which will mark a turning point in the real estate sector in the Balearic Islands. Last year in the Balearic Islands around 17,500 real estate transactions were carried out, generating an economic impact of 6.6 billion Euros. This makes the real estate sector the second largest economic sector in the Balearic Islands with a 25% share of the island's economy. Considering that 40% of real estate transactions in the Balearic Islands are in the hands of foreigners, this is undoubtedly news of international interest.
ABINI and Engel & Völkers will continue to work with the Balearic Government, the General Directorate of Housing and representatives of the sector to promote rules of conduct that improve the credibility of the real estate agent while providing legal certainty and confidence to the client.