Real estate broker (realitní zprostředkovatel)

Under Act No. 39/2020 Coll. on Real Estate Brokerage, a real estate broker (realitní zprostředkovatel) is anyone who, as a business, brokers a real estate contract - a property purchase or a contract giving the right to use a property, flat or non-residential space, such as a lease. In everyday language this is an estate agent or estate agency. The Act has been in force since 3 March 2020.

Conditions for the business

• the licensed trade “Realitní zprostředkování” with proof of qualification, for example university, higher vocational or secondary education with a school-leaving exam plus 3 years' experience, or a vocational qualification for this activity
• a clean criminal record, for a company also its beneficial owner and statutory body members
• compulsory liability insurance with limits of at least CZK 1,750,000 per event and CZK 3,500,000 for several events in one year; the insurance contract must be filed with the Ministry for Regional Development within 10 working days

Compliance is supervised by the trade licensing offices and the Ministry for Regional Development. A trade licence can be looked up in the Trade Register (živnostenský rejstřík).

How the law protects clients

The agent works under a written brokerage contract, which must state the property, the price or rent and the commission, otherwise it is void. When it is signed at the latest, the agent must give a prospective buyer an extract from the title deed no older than 3 working days and meet the duty to disclose defects and restrictions.

• exclusive brokerage with a consumer for at most 6 months, extendable no earlier than 30 days before it ends
• an advance on commission from a consumer of at most two thirds of the commission
• a consumer cannot be obliged in the brokerage contract to sign a purchase contract or an agreement on a future contract, which limits what reservation agreements may contain

Points to watch

The agent may not offer an escrow of the purchase price itself; it may arrange one with a lawyer, notary or bank. The brokerage contract must not be in the same document as the purchase contract. Commission falls due no earlier than when the real estate contract is concluded; earlier payment, at the soonest once an opportunity to conclude it has been arranged, is possible only with an express notice in the brokerage contract. If the agent has contracts with both sides, it must tell each of them the commission agreed with the other. The first meeting with a seller usually takes place at a listing appointment.