A new Act on Real Estate Brokerage (Act No. 39/2020 Sb.) will come into effect on 1 July 2020. Under the Act a real estate brokerage is defined as activities aiming to intermediate the conclusion of a real estate agreement (a purchase agreement as well as a lease agreement, except for the short-term accommodation including Airbnb and Flatio).
The Act does not affect the sale or lease of one’s own real estate and the activity of developers stays therefore unaffected. The person aiming to perform the real estate activity must fulfil the requirements specified in the Trade Licensing Act for a new regulated Czech trade “real estate brokerage”. Besides a clean criminal record, adequate education, qualification or experience in the respective field is required for a person engaged in real estate brokerage.
By 1 January 2021, all existing brokers and real estate agencies will have to obtain a licence for a real estate brokerage. If the real estate brokerage is performed by a certified person, this person has to ensure that the natural persons providing the clients with the services of real estate brokerage fulfil the same conditions as the legal person owning the respective license, i.e. a clean criminal record, and adequate education, qualification or experience in the respective field. Obtaining a licence for this regulated trade substituting the existing free trade will not be subject to any administrative fee until 1 January 2021. Further, the real estate brokers have to be insured for damage caused to the clients by the performance of real estate brokerage by 1 October 2020 at the latest. The minimal limit of insurance payment is CZK 1,750,000, and CZK 3,500,000 in the event of multiple insurance claims occurring in one year. The Act states limit of 6 months for exclusive real estate brokerage however, this period may be repeatedly extended.
The breach of some duties required by the Act are considered as a misdemeanour and a fine may be imposed by the respective state authority. Any existing relationships and agreements concluded before 1 July 2020 will continue to be dealt with in accordance with the existing legislation, and the Real Estate Brokerage Act will not apply to them.
