The draft law on real estate brokerage and leasing prohibits owners from independently advertising and selling property, requiring them to engage agencies for mediation, which could increase market prices by three percent. This is one of the key objections in the Public Discussion Report on the Draft Law on Real Estate Brokerage and Leasing published by the Ministry of Economic Development.
The ministry did not accept the objection, explaining that the draft law deals with brokerage in transactions, not the rights that the owner has regarding the property.
The draft law was prepared by the Ministry of Economic Development and Tourism in the previous government, which subjected it to public discussion.
The government prepared this draft law due to the high prevalence of the shadow economy in this area, poor service quality, the lack of liability insurance and professional qualifications for brokers, and because they currently do not have to present complete documentation for real estate. Additionally, contracts for mediation are rarely concluded in practice, lacking elements, obligations, and responsibilities, and commissions are often paid in cash rather than through an account. There is also unfair competition from unlicensed and unregistered businesses.
Due to the high prevalence of the shadow economy in this area, the state loses a significant portion of money from unreported commissions, mostly in cash and off the record, which raises concerns about controlling cash flows and taxation, according to the Ministry.
The Ministry, among other things, accepted the suggestion that the mediation agreement is valid for six months instead of one year and that the price must be specified in advertising.
The company Consulting Budva proposed that a notary should draw up an agreement between two or more parties in the presence of the agency to prevent “wild” practices. However, the Ministry stated that this suggestion is not within the scope of this law.
Regarding the proposal from Diocleia Real Estate Partners to define supervision, i.e., the body that will perform inspection tasks for this sector and oversee real estate advertising portals, the ministry emphasized that this objection is not accepted.
“The supervision of the implementation of the law is carried out by the competent ministry, while inspection supervision is carried out by the market inspection, as the competent authority for internal trade activities,” wrote the Ministry in its comment.
The Ministry accepted the suggestion from this company that the broker should make a note during the property visit, and the content of the note will be prescribed by the Ministry. The proposal is for this note to be in digital format provided by the Ministry, so all agencies would have the same format.
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