Obligatory licenses?

Legislation obligating real estate agents to obtain a professional license was passed almost 4 years ago and then deferred. As of the start of 2002, however, real estate agents are required to hold a professional license and comply with other formalities, provided in provisions of the Law passed on August 21, 1997 on Real Estate Management (hereafter called the ,Law").

The fact that the Polish legal system got round to imposing such licensing should not be a surprise; investors need as much protection as they can get for their own peace of mind. We are all aware that real estate deals usually entail transfers of significant amounts of money. An added problem is that uncertainly surrounding the legal status of numerous properties requires particular awareness on the part of the agent who, after all, should be able to preliminarily identify potential problems and suggest legal advice. Therefore, under Polish law, it is also strongly recommended that real estate agencies should be headed by persons who possess relevant knowledge and experience in this field of professional activity. On the other hand, opponents of this licensing argue that every form of licensing leads to the limitation of free market activity regardless of the activity in question, and is per se a bad thing.
Importantly, not only does the Law introduce an obligation to obtain a professional license, but also goes on to set out the legal definition of the real estate agency profession. The Law states that real estate agencies provide professional services focused on and aimed at facilitating the conclusion of agreements on the transfer of different kinds of real estate ownership interests, which also covers lease and tenancy agreements.
Does this mean that real estate agencies can only be run by a person who has a professional license and that all persons employed in a real estate agency have to be licensed real estate agents? The answer is no. As far as companies who wish to operate as real estate agencies are concerned, they are allowed to provide real estate agency services on the condition, however, that their activities are performed by a licensed person. This means that a licensed agent may be either employed by a company on a regular employment contract, or perform real estate agency activities on the basis of other agreements (mandate contract, civil law order agreement, etc.). Furthermore, the agent may perform his activities personally, or with assistance from other people working under his supervision and for whom the agent bears full legal responsibility. In practice, real estate agencies may employ a minimum of one licensed agent, with the remaining staff formally working under his/her supervision.
Real estate agency work is viewed by the Law as a professional activity and, moreover, as a ,freelance" profession. As with all other freelance professions, when performing his professional activities, a real estate agent is obliged to comply with applicable provisions in the law and professional standards, rules of professional ethics and special due diligence connected to the professional character of such activities. He is also bound by an obligation to protect his client's interests at all times, and required to develop and improve his professional skills and qualifications. Non-compliance with the aforementioned obligations may give rise to professional liability, which can result in an agent's license being temporarily or even permanently withdrawn. The Law states that real estate agents must be insured against civil liability arising from professional mistakes made either by the agent personally or by persons working under his supervision (the same obligation is imposed on companies offering real estate agency services).
A few words about formal requirements concerning the license itself. Licenses are granted by the President of the Housing and Urban Development Office (Prezes Urzędu Mieszkalnictwa i Rozwoju Miast). A license maybe granted to a person who understands the legal system, with no prior convictions for crimes connected with commerce and real estate. His/her education includes graduating from a high school (for our English readers that means with A-levels), successfully completing a special qualification course and passing an exam, as well as serving a professional probation period connected with real estate agency services. Provisions in the Law allow persons who already have real estate agency experience before it came into force (i.e. before January 1, 1998) to apply for exemptions from the probation period. A non-Polish citizen not only has to comply with all the requirements mentioned above, but must also speak Polish fluently. To conclude, the Law, were it not for the language element, would have probably not created too much of a stir - however, from the Polish agent's point of view it is precisely this issue which makes it all so deliciously sweet.

Agnieszka Lasota
Senior Associate at
the Salans Hertzfeld & Heilbronn
D. Oleszczuk law firm