Poland moves to enhance safeguards for home buyers and sellers

A draft law aimed at regulating the real estate brokerage market has been added to the Polish government's legislative agenda.

The main objectives of the proposed measures are to increase transparency in brokerage services, strengthen consumer protection, and improve the security of real estate transactions, CE Report informs via the Ministry of Economic Development and Tecnology of the Republic of Poland's official website.

The draft amendment to the Real Estate Management Act concerning real estate brokerage responds to concerns raised by market participants and to experiences gained from the current brokerage model, which is largely based on contractual freedom and market mechanisms.

“Buying or selling property is often one of the most important financial decisions in a person's life. Therefore, using the services of a real estate agent should guarantee the proper conduct of such a transaction, and the terms of cooperation must be clear and transparent. The proposed solutions are primarily intended to improve transparency and strengthen security in the real estate market,” said Deputy Minister of Development and Technology Tomasz Lewandowski.

The key measures included in the draft legislation are:

• A statutory clarification of the basic obligations of real estate brokers, including the requirement to verify the legal and factual status of a property in every case.
• A ban on charging commissions to both parties involved in the same transaction.
• New rules for publishing property listings, including a prohibition on advertising properties before signing an agreement with the owner and a requirement to clearly indicate that an advertisement has been placed by a broker.
• Expanded inspection powers for the Trade Inspection Authority over entities providing brokerage services.

The Trade Inspection Authority will be able to verify whether brokers properly inform clients about the scope of their services, ensure transparency in contracts, perform the minimum duties defined by law, refrain from charging both sides of a transaction, and do not make property viewings conditional on signing a brokerage agreement. In cases of violations, the authority will be able to impose financial penalties and order the cessation of unlawful practices, with the possibility of banning brokerage activities for non-compliance.

The inclusion of the draft in the Council of Ministers’ legislative agenda marks the first stage of the legislative process. The proposal will now proceed to further work, including public consultations and interministerial reviews.

Photo Ministry of Economic Development and Tecnology of the Republic of Poland