A law passed at the end of last year aims to protect house buyers from rogue operators. We explain what it contains and how to spot a cowboy.
The new Estate Agents’ Law, which was approved by parliament in December 2004, lays down new requirements for estate agency practice and aims to increase the protection offered to the public from cowboys and others practicing estate agency without being properly qualified or registered with the Estate Agents Registrar. Here are the basic requirements of the new law:
Who can be an estate agent?
Only those who are so registered with the Registrar of Estate Agents can practice. No company can register/operate as such and registered estate agents can only be physical persons.
Who can register?
These who have a university degree related to estate agency – such as Estate Management, Valuations etc. Civil engineers, architects, business and economic degrees are not acceptable. In addition to the university degree, applicants must have one year practice/training.
If an applicant has no university degree he can still be registered if he has eight years experience in estate agency work within an approved estate agency office. In this case, an applicant will be required to sit exams (verbal/written) on Cyprus laws. Developers’ employees are not considered as having estate agency practice.
An applicant must have a good knowledge of Greek or Turkish.
Loopholes closed
No one can call himself an estate agent, property consultant, property business, property finder etc, which may imply that he is dealing directly or indirectly in estate agency.
No one can demand the payment of a commission other than those who are registered estate agents.
Penalties
Anyone who is found guilty under this law stands to risk one year in prison, a £2,000 fine or both.
Advertising
No one is allowed to advertise properties for Cyprus unless it is their own property, they are a developer or an estate agent.
Professional indemnity
All registered estate agents must have an insurance cover of £100,000 at least.
Estate agents’ commission
Upon conclusion of a deal, the estate agent is entitled to receive his commission, unless it is so otherwise agreed. If a deal is not concluded and this is not the fault of the agent (i.e. the seller has changed his mind), the agent is entitled to his commission/damages.
Estate agent’s liability
The agent is bound to inform the prospective purchaser of any burdens that the property has, physical or legal. The agent gets off the hook if he informs the buyer that he has not been able to check these.
Signage and office
Whoever deals in estate agency must state so in all advertising materials, must have a properly equipped office and must have his registration clearly shown both on all advertising materials and in the office. Any registered estate agent must have a fully equipped office (not working from home) if he wants to practice as such.
Precautions
No UK or other foreign agent can ask for a commission unless he is registered as an agent in Cyprus.
Advertising expenses are not deductible from income tax/capital gains tax if paid to “advertisers” who are acting as undercover estate agents.
Any foreigner who wishes to operate as an estate agent in the republic must learn Greek/Turkish. This is in addition to the requirement which refers to physical persons who must sit exams in Greek or Turkish language.
Anyone who merely advertises Cyprus properties in the internet commits a crime both because he is not a registered agent, he has no office, he does not (if so) speak Turkish/Greek (even if he is so registered).
The Estate Agents association is on the lookout for cowboys, in particular retired Britons. Those who have taken on this job will find that they might end up in prison. The association of Estate Agents has set up committees to monitor advertising, internet and other activities referred to in the law.
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