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EU acts against Cyprus over estate agent curbs

Brussels considers that Cyprus’ estate agents law that imposes conditions on the professional requirements of estate agents from other EU member states is incompatible with European rules.

European Court in Brussels

European Court in Brussels

CYPRUS is in legal hot water with Brussels over restrictive practices that penalises estate agents from other EU-member states.

The European Commission has taken action to ensure that Internal Market principles of free movement of services and freedom of establishment are respected in Cyprus,” said a statement on Thursday.

The Commission said it will send a formal request to Cyprus concerning its national legislation restricting the activities of estate agents.

This formal request takes the form of reasoned opinion, if there is no satisfactory reply within two months, the Commission could refer the matter to the European Court of Justice.

Nicosia could receive a hefty fine if it fails to comply with the Luxembourg Court’s ruling.

This is not the first warning that the European Union has issued to Cyprus over its perceived discrimination against non-Cypriot EU citizens trying to establish themselves in property sales.

In Brussel’s view, the restrictions placed on estate agents are incompatible with EU rules and it is unhappy that would-be service providers must pass an examination proving knowledge of Cypriot legislation in this field.

The amended Law imposes certain conditions upon the recognition of the qualifications of professionals established in other Member States,” said the Commission.

These conditions concern qualifications and professional experience and therefore raise problems of conformity with Directive 2005/36/EC on the recognition of professional qualifications.

It argued that obliging European professionals to collaborate with at estate agent established in Cyprus goes against the fundamental principle of freedom to provide services.

Cyprus is also in the doghouse for snubbing European regulations by insisting estate agents in a company are required to exercise this activity exclusively in the company that employs them and may not act independently of their employer.

Local companies say the law is there to protect home buyers from ‘unscrupulous cowboys’ who parachute in to make a quick profit.

Services are crucial to the European internal market and account for between 60 and 70% of economic activity in the 27-bloc and a similar proportion of overall employment.

The key principles governing the internal market for services guarantees EU companies the freedom to establish themselves in other Member States, and the freedom to provide services in that territory.

© Cyprus Weekly 2009

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