The Valencian Comunidad, encompassing the provinces of Alicante, Castellón, and Valencia, is transforming the real estate sector. A new law introduces stringent requirements, promoting expertise, commitment, and accountability standards for all real estate agents participating in regional transactions.
Reforming an Unregulated Landscape: A Milestone for Valencian Real Estate
While countries like France, Germany, Holland, and Belgium have long maintained regulations in the real estate profession, Spain has yet to provide management. People from other countries who buy property in Spain and expect the government to regulate the real estate industry are often uneasy because there are no training, certification, or registration requirements.
However, some regions in Spain, such as Andalusia, the Canary Islands, Madrid, Murcia, and now the Valencian Community, have set up registries that require real estate professionals to register before they can work. The main aim is to ensure that all people and companies involved in real estate transactions in the Valencia area follow the same standards and are appropriately monitored.
Raising the Bar: Registration and Obligations
Registering as a real estate agent involves more than just adding your name to a list. It requires meeting specific standards, completing mandatory training, and having civil liability coverage to protect against potential losses. This is not unlike the mandates for other professions including doctors, lawyers, architects, and accountants. The goal is to make sure that real estate agents are competent and knowledgeable enough to work in the industry.
The impact of this registration will significantly affect the real estate sector in Valencia. Agencies that have a good reputation for being ethical will be approved to work legally. Those who act unethically or are not prepared for the extra responsibilities will not be added to the register and cannot work legally.
Fines and Penalties
Failing to stick to the rules could result in penalties under the new laws. Fines could range from €10,000 to €950,000, depending on the violation. These strict penalties are meant to deter cowboy agents and improve service quality and protect clients.
Defining the Purpose: Role of the Registry
This law aims to create a “Registry of Real Estate Brokerage Agents” in the Valencian Community. Real estate activities include the buying and selling of real estate like houses, apartments, and land. However, the new law applies only to those involved in residential property sales. The goal is to make these services more transparent and better protect consumers.
Inclusion Criteria: How To Comply
The law applies to everyone who wants to work regularly in housing real estate brokerage within the Valencian Community. This includes individuals, companies, and anyone who mediates, advises, or manages real estate transactions like sales, rentals, and assignments. Agents must show that they meet certain requirements in specific categories to be included in the registry.
- API Collegiate agents: Agencies with API accreditation.
- University degree holders: Those with university qualifications in social and legal sciences, engineering, or architecture.
- Professionally trained individuals: Anyone with the requisite training to work with real estate agents.
- Certificate holders: Individuals who have completed a training course with at least 200 teaching hours.
These courses focus on property mediation services, real estate advice, and management. Candidates may learn in a classroom, online, or a combination of both.
Many real estate professionals in Valencia are from abroad and don’t hold university degrees. To continue working in real estate in Valencia, they must complete 200 hours of professional training.
Regular Engagement Rule
If you have helped buy or sell property in the Valencian Community at least twice in the past year, you are now considered a real estate agent under the new rules. This means you need to register with the agents’ registry and meet the requirements set out in the regulations to continue in the sector.
Real estate agents with offices in other parts of Spain and who have already completed the necessary training in their home region can also sell property in Valencia. For example, suppose you are a property agent in Malaga, registered in Andalusia and have met previous training obligations. In that case, you can sell property in the Valencian region. However, you still need to register with the Valencian Community registry, although you will likely be approved automatically to operate within the Valencian Community’s real estate market.
Physical Presence Mandate: Location
A physical establishment is important when becoming a certified real estate agent. However, this requirement can be waived if you offer services only online or through telecommunication. If you do have a physical establishment, like a professional address or office space, you must follow all legal rules and have the necessary permits, licenses, and tax registrations.
Even if you only offer services electronically or through telecommunication means, you still need a physical address in the Valencian Community. If your agency only functions electronically, then the company administrators, managers, and anyone associated with the physical address used for electronic services must undergo the required training. For example, suppose an agency in Murcia provides services in the Valencian Community through a physical address without an office open to the public. In that case, the individual responsible for that physical address must also undergo training.
Financial Soundness: Meeting Solvency Requirements
Under the new rules, estate agents must have insurance and service guarantees. This will protect them and their clients if anything goes wrong. They should have a bank-issued guarantee or insurance from a recognised company to ensure the return of any deposits related to the property purchase.
Agents who work in a physical office in the Valencian Community must have a minimum guarantee or surety insurance of €60,000 per year per office. This will help protect everyone involved if the agent can’t fulfil their obligations. If an agent works online, the required amount of insurance increases to €300,000 per agent per year.
Agents must also have civil liability insurance that covers damages caused by errors or negligence. This insurance should provide at least €600,000 per claim and year, with a limit of €150,000 per victim. Agents who work solely online, must have at least €1 million in insurance coverage per claim per year, plus an extra €150,000 per claimant.
Agents must provide their policy numbers, insurance company details, and any guarantees if requested. The agent should also add this information to contracts. Insurance and guarantees can be acquired individually or through professional associations that include solicitors, real estate agents, engineers, architects, and more.
Enrollment and Inscription
To register with the Generalitat Valenciana registration service, you can apply electronically as an individual or as part of a group. If applying as an individual, you must submit a declaration of responsibility, identification documents, and other necessary information, including:
- Physical address or confirmation of online exclusivity
- Confirm the acquisition of requisite permits, activity licenses, and tax registrations in the capacity of a self-employed real estate broker.
- Pledge adherence to professional ethics, maintaining confidentiality, and transparently disclosing commissions, fees, and other remuneration structures as per established conduct principles.
- Present proof of professional civil liability insurance and surety policy
Undertake to uphold the conditions and requisites the regulation prescribes to streamline real estate agent activities.
Simultaneously, this declaration authorises the administrators of the Valencian Community’s agents to conduct the necessary checks and verifications on the submitted documentation, ensuring compliance with the stipulated legal requisites.
Inscription in the Register
The enrolment process culminates in registering the concerned party in the registry. Upon submitting an application and declaration of responsibility, the applicant is issued an inscription number and documentation verifying the registration.
Each agent must personally qualify, even if applying as a part of a group application. Individually tailored registrations are required for each agent included in the collective application.
The registration status is valid indefinitely. It confers immediate authentication to individuals who satisfy the eligibility criteria. But ongoing adherence to the obligations and commitments pledged during registration is paramount to sustaining eligibility.
Registered professionals must diligently ensure that their information remains current and promptly inform the administration of any modifications. A responsible declaration must be provided following the regulations for updates or changes to their details.
Circumstances for Cancellation
The cancellation of registration might occur under the following circumstances:
- Demise: In the event of the individual’s death.
- Termination of tax activity: For legal entities, cessation of tax activity results in cancellation.
- Non-compliance: Failing to meet the registration requisites at any point during professional engagements could lead to cancellation or impose financial penalties.
Time Frame and Deadlines: Act Swiftly
Individual applications have a year-long window from this decree’s enforcement date. Professionals involved in real estate activities falling are granted until August 2023 to register in the Valencian Community’s real estate agent registry, accompanied by the procurement of civil liability insurance policies and guarantees.
As for collective applications or associations, they had a maximum duration of six months from the decree’s enactment to submit their applications, meaning they should have sought registration before April 2023.
