31.05.2021 11:58
This new piece of legislation on real estate brokerage has already been signed by the President of the Czech Republic and will come into effect on the fifteenth day after its publication in the Collec-tion of Laws (according to the latest information the Act should be published in the Collection of Laws on 17 February 2020 and thus come into effect on 3 March 2020). The most important changes introduced by the Act are discussed below.
ZThe Real Estate Brokerage Act (ZRZ) defines the terms: (i) real estate brokerage (i.e. the activity of a real estate broker/agent as an entrepreneur); (ii) the real estate brokerage agreement (i.e. the contractual obligation of the real estate agent to mediate a real estate contract for the in-terested party); and (iii) the real estate contract (i.e. the brokered contract; in particular, a contract for the acquisition of real estate; a lease contract for a flat or commercial premises).
Both legal entities and self-employed natural persons may act as real estate agents. However, the Act newly introduces various restrictions on their activities (e.g. in the field of financial custody) as well as new obligations (e.g. mandatory insurance, liability for damage caused by real estate bro-kerage). In addition, special administrative infringements in the area of real estate brokerage and underlying financial penalties have been introduced. An important modification is the fact that the business of “Real Estate Brokerage” has been moved from the free regime to the regulated regime of a licensed trade. Consequently, there are new requirements for proving professional qualifica-tions of the responsible person (amended Act 455/1991 Coll., the Small Business Act).
On the other hand, the Act offers more protection to consumers (individuals not businesses). For example, in the event of failure to comply with the written format of the real estate brokerage agreement and/or failure to comply with the content requirements on the real estate brokerage agreement stipulated by the Act, the Act enables the consumer (the interested party) to seek that the agreement be deemed invalid. The Act further gives the consumer a right to withdraw from the signed real estate brokerage agreement in the event that the real estate agent fails to fulfill their information duty towards the consumer within the statutory deadlines (e.g. on specific defects and limitations of the real estate in question).
We remain at your disposal and stand ready to provide you with detailed information regarding the consequences of the Real Estate Brokerage Act on the position and activities of the real estate agents and/or consumers, as well as regarding a particular real estate transaction.