By the end of 2021, the Portuguese Real Estate Mediation Law (Law 15/2013 of 8 February) will be reviewed. It is therefore a good time to do a short review of the responsibilities of the real estate agencies towards their clients in order to understand how important it is to work with agencies that are duly authorized and registered with the regulatory entity of the real estate sector.

The law states that the activity of real estate mediation (or brokerage) is the search, by companies, on behalf of their clients, for properties and owners in order to carry out deals for the constitution or acquisition of rights over real estate properties (such as, for example, the right of ownership over a property), as well as the exchange, transfer, lease or assignment of positions in contracts which have real estate as their object (such as a promissory contract of purchase and sale, for example).

As so, the following activities are considered real estate brokerage:

• Prospect and gather information in order to find real estate properties for clients (being considered a client any person or legal person that enters in a contract with a company qualified under the law to provide real estate brokerage services);

• Promote real estate properties for their clients to do deals, namely through the disclosure, advertising or auctions of those deals.

In Portugal, real estate brokerage can only be practiced by real estate agencies, that must hired by signing a written contract for such purpose. IMPIC (Institute for Public Markets, Real Estate and Construction) is the regulatory entity that oversees the construction and real estate sector, supervising and regulating the activities developed in this economic sector.

Thus, anyone wishing to carry out real estate mediation activities must previously file a licensing application with IMPIC, and (i) be of good commercial reputation (no criminal record, etc..) and (ii) hold a civil liability insurance, financial guarantee or another guarantee accepted by law.

After the application takes place, the issuance of the license will depend upon proof of the necessary legal requirements and the payment of the correspondent fees. The licenses granted by IMPIC and the identification cards issued shall be valid for an unlimited period of time. Nevertheless, the licenses will expire in case the company fails to comply with the legal requirements. It is also possible that the license is suspended or cancelled. Finally, the license cannot be sold are given away for any purpose.

Real estate agencies liability

Real estate brokers are obliged to comply with several duties towards their clients. They must:

• Make sure that, at the time of the real estate agency services contract is signed, the clients have the necessary legal capacity for the deals they intend to enter into

• Guarantee the correspondence between the characteristics of the property and those provided by the client

• Propose the deals that they are in charge of, making use of the utmost accuracy and clarity regarding the characteristics, price and payment conditions of the property

• Immediately inform their clients of any fact that might jeopardize the completion of the deal

Failure to comply with the above-mentioned duties may result in the obligation of the intermediary to compensate its clients under the terms of the contractual civil liability regime, without prejudice to the sanctions that may be applied by the regulatory authority, such as a fine from €2,500.00 up to €25,000.00, suspension or even closing the establishments.

Finally, real estate agencies are liable for the penalties when the facts have been committed by members of their directors, representatives, agents, or employees, during the exercise of their respective activities.

To ensure liability arising from their activity, real estate agencies established on national territory must hold a civil liability insurance, with the minimum amount of €150,000.00, and this insurance must meet the minimum conditions set by law.

Departamento de Derecho Inmobiliario | Portugal

Belzuz Abogados SLP

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