President Signs Amended Property Law
On 7th June, President Aleksander Kwasniewski signed a long awaited revision of the Statute on Real Estate Management. Among many extensive changes to the existing law there is a section dealing with the licensing and responsibilities of agents, valuers and property managers. Whilst for several years it has been illegal to practice as a real estate agent , valuer or property manager without a statutory licence or qualification, the system of enforcement was unclear and the potential penalty, a fine of only PLN 5000.
The amended law, which comes into force on 22 September 2004, imposes potential penalties for non compliance, of arrest (max 30 days), restriction of freedom (max 1 year), or a fine (max PLN 5 000) under the Polish code concerning infringements. Such penalties can be applied to both unlicensed individuals and their employers.
Enforcement of the licensing system will become the responsibility of The Ministry of Infrastructure. The latter will have the power of entry to firms' premises with a view to inspecting valuation reports, agency agreements and property management agreements.
The good news for agents and valuers is that the amended law entrusts them with additional competencies. Thus estate agents, in addition to facilitating property transactions, will be allowed to undertake expert studies and advisory work in connection with the property market. Qualified valuers, in addition to carrying out formal valuation reports, will now also be able to officially carry out advisory work in connection with the real estate market as well as expert studies relating to property investment, local master plans, mortgage lending value, investment worth assessments and valuations for accounts purposes.
In carrying out his duties a licensed agent will be allowed to seek the assistance of an unlicensed colleague. However in such circumstances the license holder must take full responsibility for the actions of his helper and risks losing his licence for any incompetent or dishonest actions of the latter.
The amended law provides for the scope of agency activities in each case to be defined in writing by a written "agency agreement". The agreement must state the name and licence number of the responsible agent. Furthermore the agent must confirm in the agreement that he possesses professional indemnity insurance, as required under the statute.
Another major change is the raising of the minimum educational requirements for candidates entering the agency and property management professions. Until now a high school certificate and basic agency or property management course sufficed. As from 1 January 2006, all candidates will need to have obtained a university level degree followed by post graduate studies in real estate agency or property management, before being allowed to sit the national licensing examination.
Valuers already have to satisfy similar minimum educational requirements but now the amended statute restricts future entry only to those with a degree in law, economics or a technical subject.