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ILLEGAL ESTATE AGENTS AND THE DAMAGE CAUSED

Published on 24th November 2020

In order for someone to be licensed to work as a real estate agent there are a lot of criteria to be fulfilled, as specified below.

To begin with, following a legislation amendment one is required to have a university degree in a related field.

Secondly, it is required to have worked for at least one year in a licensed real estate office.

A licensed estate agent must also have passed the exam organised by the real Estate Agents Registration board, (ΣΕΚ).

For an estate agent to operate within the parameters of the law, there has to be a suitably equipped office space with all the relevant licences posted and a valid professional insurance cover in force.

Illegal

It is understood that it takes time and money to implement all the above, in contrast to an illegally-operating estate agent, something which is both unjust and illegal.

If such a legally-operating agent causes damage to a client through negligence then the insurance is forced to cover this damage.

On the contrary, if a non-licensed agent is involved the clients will find themselves out on a limb.

These ‘’pirate’’ agents could easily be tempted to break the law and take advantage of clients before they disappear in thin air, since they feel free to operate in an environment where the laws are the least of their concerns and are answerable to no one.

On the contrary a licenced agent involved in a similar situation might end up losing his/her professional licence.

A different type of illegal operation found fertile ground within the investment procedures to secure a Cypriot passport, with lawyers and accountants referring their clients directly to land developers. They receive significant commission which they present as a service/consultancy fee or legal expenses.

Client’s gains

In the case of licenced agents their commission, (including VAT), can be used to reduce a client’s tax fees (capital gains tax), as their invoice is filed with all other documents with the tax authorities of the state.

This is clearly not the case with rogue agents as they cannot issue an invoice which is tax-deductible.

The state also stands to lose as the ‘agent’s’’ fee is not declared and taxed.

We think that all the above are good enough reasons for property owners planning to sell to ask the agent to present the professional licence issued annually by ΣΕΚ.

ΣΕΚ must try to locate these illegally-operating agents and send them to court. Bear in mind that these are offences of a criminal nature, punishable by fine or imprisonment, or both.

We urge all legally-operating colleagues to report any rogue agents as they are operating illegally and can be very competitive as they do not have to pay any costs.

We also urge unlicensed agents to apply to get a license. If not, they can get an assistant estate agent license working for a licensed agent with few requirements.

We also urge ΣΕΚ to be more productive and vigilant in tracking down and reporting these cases to the authorities.

This problem shall be solved if we follow the example of other European countries where the involvement of a licenced real estate agent is a must for the property sale procedure to go ahead, safeguarding the interests of owners and buyers in particular.



Written by: George Mouskides

                  Director FOX Smart Estate Agency

                  Chairman Cyprus Association of Property Owners (ΚΣΙΑ)

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