Nina Boteva Law Office

Draft Law on intermediary services in real estate transactions was introduced

At the end of July, a draft Law on intermediary services in real estate transactions was introduced. The reasons for the adoption of this bill are related to the fact that in Bulgaria the profession of real estate brokers and agents is not profoundly regulated by law.

The current scarce regulatory framework is extremely insufficient, as there are no requirements for professional qualification and legal capacity to exercise intermediary activity in real estate transactions. In addition, there is no legal regulation on the respective guarantees and responsibilities of intermediaries for damages caused to customers, excluding the general rules for property liability under the civil legislation. In practice any person can conduct real estate transactions, regardless of his knowledge and experience. In contrast to this, the grounds for the draft law pointed out that for some categories of intermediaries in other areas, special legal regulation is foreseen, such as for insurance intermediaries and credit intermediaries.

Both legal entities and individuals, some of whom do not have any registration, do not pay due taxes and do not keep any records for the services they provide. There are no legally established standards and requisites applicable to contractual legal relations between real estate agencies and their clients.

The above problems require legal regulation of the status and activity of agencies, brokers and real estate agents. The adoption of a special regime leads to an increase in the protection of public interests and to the creation of a professional community that will establish order and responsibilities in the implementation of intermediary activities in real estate transactions. Public trust in real estate agencies, brokers and agents will be increased and the risk of property fraud and misuse of the clients' personal data will be reduced. Conditions will be created for enhancing the experience and professional qualification of real estate brokers and agents, which is directly related to increasing the quality of the services they provide.

The adoption and implementation of a special law in the area of facilitation of real estate transactions, on the other hand, is not related to funding by any central and/or local government bodies, i.e. no financial burden is created for the state and municipal budgets.

The draft law provides for the establishment of a Chamber of Real Estate Brokers and determines the rules and procedures of its activity. The creation of a Professional Code of Ethics and a Commission on Professional Ethics, as well as a Register of intermediaries in real estate transactions, is also foreseen.

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