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1. Relationship of Practitioner to Buyers and Sellers - What defines the “legal” obligations between the practitioner and the party - i.e. is there an equivalent of “agency” or is there something else? Are contracts with the buyer? or Seller? or both? Are contracts typically written or verbal? Are contracts mandatory? Are there other types of relationships between real estate practitioners and the consumer that are not agency based – e.g. facilitator?
A relationship between a real estate agency and a client is based on a contract, typically written contract, although Slovak law admits verbal form, too. A real estate agency may sign a contract with a seller, or a buyer, or, in some cases with both parties. Although signing a contract is not an obligation, NARKS' members are advised to have each business case covered by a written contract.
2. Services – Are services primarily to assist in sale? rental? What services are provided by the real estate practitioner to sellers and buyers?
Real estate agencies provide their clients with purchase and rental services, or they actively search for real estate for their clients. Among main services provided by real estate agencies we could mention: real estate advising, advertising and real estate marketing, real estate inspections and communication with interested parties, formulation of contract terms between parties, proposal of the contract itself, or communication with the land register. Information on established obligations, e.g. permanent residence registration, permanent residence cancellation, change of service-suppliers, tax and other duties.
3. Remuneration – How is remuneration paid? And by whom? What is the method of payment (i.e. commission, fee etc.). When does payment occur? How are funds controlled in real estate transactions? And by whom? Are there any statutory restrictions on remuneration?
A real-estate agency commission fee is paid by the client who had offered a service – either a seller, or a buyer of a real estate. Commission is payable after the purchase is successfully finished – after the contract is signed. Payment for a real estate is not based in the real estate agency, even though any method of real estate payment is allowed by the law- cash, bank account transfer, etc. A common business practice which is also advised to NARKS members is that the payment for real estate is tied outside the reach of contract parties – most often in specific bank accounts or at a notary. The money are released after the transaction is finished and after the real estate has changed the owner.
4. Entrance/Statutory/Licensing Requirements – What are the entrance requirements for a real estate practitioner? What education, courses, certifications etc. are required? Is there mandatory continuing education? Can a practitioner market properties anywhere in the country? Are there regional/local etc. restrictions? Can a non-resident market properties? Who regulates the industry and how? Do you need to be licensed and how often are licenses renewed?
To obtain an authorization to work in the real estate business, an applicant has to fulfill requirements stated in the trade law. Nowadays, running a real estate business is a constrained activity. Requirements are as follows: a university degree in economics, engineering or law, or 5 years of experience in the business. There are no other requirements regarding education or membership in a professional body. There is only one kind of authorization that is valid for all kinds of real estates and that is valid in all country regions. There is very little state regulation in the business.
5. Marketing System – Does a marketing system exist? Is it manual? Computerized? Local/regional/national in scope? Are any marketing systems web based? What types of properties are included – residential, commercial? Sale or rental? Are these systems proprietary? Who has access to and who operates any marketing systems?
Real estate marketing has been expanding recently. There is more and more financial means being spent on marketing, particularly on newly-developed projects. Real estate agencies use computer software and web sites are a common practice. There are several professional search portals available to the public – the biggest and best known is Reality.sk. This on-line system as well as the associated software is provided by a subsidiary corporation of the association, with NARKS patronage. Within this marketing application it is possible to advertise all kinds of real estate and all kinds of transactions.
6. Practitioner Dispute Resolution System – Is there a mechanism, other than through the legal system, to adjudicate remuneration disputes between real estate practitioners?
Only NARKS members are allowed to contact the supervisory board that is in charge to make resolutions in disputes among NARKS members. Besides common courts, so called arbitration tribunals are allowed by the legal system of Slovakia which belong to commercial corporations working under certain legislation.
7. Referral Systems – Is there a national referral system? Are referrals commonplace? Are most companies locally based or national? Are these companies involved in other business activities in addition to real estate? Are referrals regulated in any manner?
Most of the companies acting in real estate business are local companies. Lately, foreign companies, most commonly franchise companies, have been entering the market. Among developing companies, there is a growing proportion of foreign companies. Regarding project realization there is, however, a cooperation between foreign and local companies.
8. Foreign Ownership – Is there legislation that restricts foreign investment?
Since the EU entry in 2004, attenuation of real estates by foreigners has been restricted very little. The restricted cases include land purchase of agricultural land which is situated behind the boundary of a built-up area, and land purchase of forest land which is situated behind the boundary of a built-up area. These restrictions are not effective for foreigners having Slovak citizenship or those EU citizens who had been maintaining the land for at least 3 years. There are certain restrictions regarding specific types of real estate.
9. Land Registration System – What is the nature of any system for registration of property ownership? Is it computerized? Who runs it and who has access?
All real estate is registered at the Real estate register that is run by the state. The register contains a list of all rights of property regarding real estate, and other lists, e.g. rights of liens, rights of users, etc. The Register keeps a record and archive all contracts and documentation regarding real estates. Real estate register information is public and available via web as well, but the information may not be valid to-the-date since there is a delay of several days till the real data are uploaded. An „On-line Real estate register“ has been being developed by the state in order to have the possibility to make all operations on-line, and in order to have all the information up-to-date.
10. Other Industry Professionals - Are there other professions directly involved with and being paid for the sale/rental of properties? Can lawyers sell properties? Are lawyers, notaries or other professionals required to be involved to complete real estate transactions?
A real estate agency may carry out all transactions by itself, there is no need of cooperation with other professionals – there is an exception, however: signature of a seller must be verified by a notary or a parish registrar.
11. Discipline/Code of Ethics – Does some form of Code of Ethics exist? Is there an internal discipline process? Who is responsible for its enforcement?
It is an obligation of NARKS members to obey and follow the Code of Ethics. In case of complaint from the client’s side regarding acting of a real estate agency, an ad-hoc committee is formed that investigates the case. After the standpoints of both parties are obtained, a final decision is made. On the basis of this decision, our presidium may, in case of fault of a member, impose a sanction that is specified in the NARKS statute.
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