24 Nov 2020
By virtue of L.N. 291 of 2020, the Real Estate Agents, Property Brokers and Property Consultants Act, 2020 (Chapter 615 of the Laws of Malta) (“Act”) has come into force; its conditions shall be applicable as from the 7th of July 2020.
The PDF guide can be downloaded here.
Who needs a licence? By when?
The Act stipulates that persons carrying out the activity of a (i) property broker; or (ii) real estate agent; or (iii) engaged as a branch manager; or (iv) property consultant, must obtain a licence in order to carry on doing so after the 31st of December 2021.
The Act defines such terms as follows:
The Act defines the activity of a property broker or real estate agent as being “the acting as an intermediary in the process of negotiating and arranging transactions which involve the acquiring or disposing or leasing of land, including when such activity is carried out through the engagement or the employment of a branch manager or a property consultant or both”.
The Act also requires the formation of a partnership when a real estate agent intends to carry out his activity with another person.
A licence is not required where a person carries out such activity on an occasional basis and where one does not advertise his services, nor does he employ or engage anyone to assist him with such activity. The Act also defines the term ‘occasional basis’, as “the acting as an intermediary in the process of negotiating and arranging not more than two (2) transactions per annum involving the acquiring or disposing or leasing of land”. This is also applicable to property brokers.
Nevertheless, the Act still requires that such exempt persons submit a notification to the Licensing Board (“Board”), to notify the Board of the intention to carry out such occasional activity.
Any person who does not comply with the aforementioned requirements shall be liable to an administrative fine (multa) which is not to exceed twenty thousand Euro (€20,000).
With respect to who is eligible to obtain a licence, when it comes to persons wishing to act as (i) a property broker; or (ii) a real estate agent; or (iii) a branch manager, such person must be at least eighteen (18) years of age (or emancipated to trade); and must hold a certificate in real estate, whereby it is to have as its subject matter the legal, financial, technical and communication issues related to real estate, its marketing and sale.
In this case, the certificate must be equivalent to a minimum of twelve (12) ECTS at level four (4) of the Malta Qualifications Framework attained from a fully licensed training institution with a regular licence by the National Commission for Further and Higher Education. The requirements remain the same for persons wishing to act as property consultants, the only difference being that the certificate which they are to hold must be equivalent to a minimum of eight (8) ECTS.
The Act provides that the following persons are not eligible to apply, or to obtain a licence: (i) bankrupt persons who have not obtained an order of discharge (or whose discharge is suspended for a term which has not yet expired, or is subject to certain conditions which are not yet fulfilled); and (ii) persons not deemed as fit and proper to carry on the activity of property broker, real estate agent or to act as a branch manager, regard being taken to the persons conduct, repute and financial position.
L.N. 434 of 2020, published on the 20th of November 2020, provides that persons who intend to apply for any of the licences mentioned above by the 31st December 2021, but who are not eligible to proceed directly to apply for such a licence, must by not later than the 31st March 2021 inform the Board of their intention to apply for a licence.
Persons eligible to apply for a licence must submit an application to the Board in the prescribed form. In the case that a partnership needs to be formed, the application is to include, inter alia, the principal place of activity, along with the details of all beneficial owners, where such shall be deemed to be the same persons as defined in the Prevention of Money Laundering and Funding of Terrorism Regulations (S.L. 373.01). Authorisation shall take place after all requirements as stipulated in the Act are abided by, and following the Board’s assessment of the beneficial owners’ conduct and repute, their financial position, and the interests of the public, and determination as to whether or not such persons are deemed to be fit and proper persons to be involved in such a partnership.
No change in the beneficial ownership, or in the board of directors, or partners of a partnership carrying out such activity, is possible, prior to the Board’s approval.
The applicant is to submit an application to the Board with all the required documentation. Following receipt of an application, the Board is to acknowledge receipt of such and is to process said application within two (2) months, unless more time is required, depending on the case at hand.
In the granting of a licence, the Board has discretion to subject the applicant to any condition that it deems fit. The Board also enjoys the power to vary or revoke such conditions, or to impose new ones.
Activity may start following approval of the licensee’s name by the Board. The Board may refuse names which it deems to closely resemble, or which belong to other persons, firms, or companies exercising the activity as a licensed property broker or real estate agent in or outside Malta.
The Board shall issue an identity document to licensees, whereby such document shall contain a photograph of the licensee, as well as the licence type, registration number and the term of validity, amongst other details. Such identity document is to be returned back to the Board, upon suspension or revocation of the licence.
Persons exercising the activity of a property broker, or of a real estate agent prior to having their name approved by the Board shall be liable to an administrative fine (multa), where such fine shall not exceed twenty thousand Euro (€20,000).
A licence shall be valid for a term of five (5) years from its issuance. It is possible to renew a licence following its expiration unless there are grounds which otherwise prohibit said renewal. The Act provides us with grounds which would lead to a licence not being renewed. These are: (i) if the licensee has been found to be in breach of any provision specified in the Act; (ii) if the licensee has permitted any person, other than another licensee, to act as his agent in the exercise of his activity; (iii) if the licensee is no longer deemed to be a fit and proper person to carry out such activity; (iv) if the licensee failed to undertake a set minimum of hours of continuing professional development (as set by the Board during the preceding five (5) years).
A licensee may also surrender his licence prior to the expiration of its term. This shall be done by forwarding a written notice to the Board, together with the licence. Moreover, the Board has the power to suspend or cancel a licence, in situations denoted by the Act.
The Board shall set up and maintain a Register of Licences which shall be available to the public.
The Act stipulates that licensees shall make known to consumers the fees to be charged for their services in advance. If a transaction is not completed, and where the licensee was active throughout said transaction’s negotiations between the parties, fair compensation to the licensee would still be due, whereby such compensation shall be determined by a court.
Appeals from Board decisions are to be held in front of the Administrative Review Tribunal, the latter being deemed as the competent body to hear and determine objections made by any person aggrieved by any decision of the Board.
Objections lodged, to be heard by the Administrative Review Tribunal, must be filed within twenty (20) days from the receipt of the Board’s decision.
Decisions of the Administrative Review Tribunal are also subject to appeal, whereby such are to take place in front of the Court of Appeal (Inferior Jurisdiction).
This Act brings with it major overhauls in the real estate industry. Not only does it regulate the industry, but it also ensures a level of knowledge and education in those working in it, in the best interests of consumers. This is further reinforced with the requirement of continuing professional development to ensure that the person remains competent to carry out such activities.
The information above does not, and is not intended to constitute legal advice and should not be relied on as such. For any specific matters kindly seek legal assistance.