The State Property Fund in Cooperation with Non-Governmental Organizations has Created a Draft of a Bill on Real Estate Brokerage
As result of a work of the State Property Fund of Ukraine in cooperation with non-governmental organizations (NGOs) in RE industry (realtors) and state authority bodies were created a law draft on real estate brokerage (realtors’ activity). The law draft was developed to fulfill an order of Stepan Kubiv, the First Vice Prime Minister of Ukraine – Minister of Economic Development and Trade of Ukraine.A special working group was set up to draft the bill by order of the State Property Fund. The working group included representatives of NGOs, in particular: FIABSI-Ukraine, Association of Real Estate Specialists (Realtors) of Ukraine, Alliance of Specialists of Real Estate Property of Ukraine, Professional Association of Realtors and Certificated Analytics, as well as the representatives of state authority bodies - Ministry of Economic Development and Trade of Ukraine, State Financial Monitoring Service of Ukraine and Antimonopoly Committee of Ukraine.
The draft law was created with aim to organize the system of state and public regulation of realtor activity. It defines the clear professional activity terms on a real estate market, and, consequently, create law base to activities of organizations (realtors, real estate brokers), which provide the sale and purchase (exchange) transactions processing and rent of real estate.
As of today there is no any legislation and unified regulatory framework that regulate this activity area andestablishes general rules of activity in this sphere, as well as no defined legal consequences for violating the law. This situation leads to complete distrust to the specialists in this area, and appears so called “grey” realtors, which activity is fraud.
Draft law determines main legislation principles of realtor and (brokerage) activity and it development in Ukraine as well as improving the quality of services in this area.
Duringthe drafting of the bill, the conceptual decisions which are reflected in the provisions of the bill were made by the working group, in particular:
1) the term “Realtor” and its derivative words and phrases in the legal field of Ukraine can’t be applied, since this term is registered trademark belonging to the National Association of Realtors of USA.Considering this fact, the decision on change the title of draft law to draft of Law of Ukraine “On Real Estate Brokerage”;
2) to set the simple rules to carry out real estate brokerage;
3) a definition of the rights of participants in the real estate market and their responsibilities;
4) the need to maintain a level of qualification by real estate brokers and real estate agents;
5) the distinction between state and public regulation of brokerage in the real estate area;
6) government control by compliance brokers and real estate brokers with legislation on real estate brokerage.
According to the draft law the real estate brokerage can be carry out exclusively the brokers.In order to acquire such status, the business entity must meet the three main criteria:
to have at least one real estate broker in the staff or should be a physical person – entrepreneur;
to obtain in the State Property Fund of Ukraine a Certificate of the right to engage in brokerage in real estate;
be included in the State Register of Real Estate Brokers and Brokers.
In accordance with provisions of the law, the participants of a real estate marketare brokers – business entities, real estate brokers, real estate agents, customers of broker services in real estate market.
The draft law lays the framework for improving the quality of brokerage services in the real estate sector. According to the results of the work, the working group agreed on the need to:
passing short-term training by an individual who plans to work as a real estate agent;
every three years confirm the qualifications of a real estate broker by passing a qualification exam.
In accordance with the provisions of the draft law the regulation on real estate brokerage is carried out through public regulation, which is provided by self-regulatory organizations of real estate brokers and real estate agents.
State regulation of brokerage activity consists in registering brokers and real estate brokers in the state register and issuing relevant documents, which will give the right to specified real estate market participants, provide brokerage services. Besides, in accordance with the provisions of the draft law, a state regulation of a real estate brokerage will be carried out by the State Property Fund of Ukraine by providing a unified legal framework, which will determine the general rules for real estate brokerage activities and cancellation of permit documentsin case of violation by the brokers or real estate brokers of the said legislation.
The control over the activity of brokers and real estate brokers will be carried out by a qualification-disciplinary commission.The State Property Fund of Ukraine, as a state regulator, will ensure the implementation of the decisions taken.
For violation of the brokerage legislation by the real estate broker and (or) the brokerto the specified participants of the real estate market, appropriate disciplinary action may be applied, in particular: suspension of the validity of a certificate of a real estate broker, extraordinary qualification confirmation, training and cancellation of the permit document.
The control over the activities of real estate agents is carried out by self-regulatory organizations of real estate brokers and real estate agents.
It should also be noted that the draft law contains a provisionprovisions defining the legal framework for the cooperation of real estate brokers (realtors) with business entitieswho specialize in placing on the Internet information on the sale (lease (hiring)) of real estate.The above provisions will ensure the purity and transparency of sales (lease (hiring)) real estatewhich are contained on web pages on the Internet.
It is necessary to pay attention to the fact that the draft law does not come into force immediately after its official publication, but a year later.This year is necessary for implementation of some provisions of the bill.During this period transitional provisions will operatewhich allow all specialists in this area and business entitieswhich provide broker (realtor) real estate servicesto work on the basis of those documentswhich they have at the time of the adoption of the Law of Ukraine “On Real Estate Brokerage”.Subsequently, these documents will also operate subject to the provision of relevant information about such documents to the State Property Fund of Ukraine.
This draft law is proposed for consideration in order to receive comments and suggestions from individuals, legal entities and their associations.The received comments and proposals will be processed and introduced into the draft law, and the final version will be re-published on the website of the State Property Fund of Ukraine for the purpose of conducting public consultations.
Comments and proposals to the bill are to be sent on paper to the State Property Fund of Ukraine at the address: 18/9, Henerala Almazova str., Kyiv city, 01133.