Source: https://ba.bloombergadria.com/
- The full implementation of the Law began on 1 April 2023.
- Every agent must have a good knowledge of property law
- Until the adoption of the Law, our country was the last country in the region without a legal market framework
The Law on Mediation in Real Estate Transactions of the Federation of Bosnia and Herzegovina was adopted on 1 October 2021, but its full implementation began on 1 April 2023. The adoption of this Law regulated several segments, starting from the education of agents and achieving a higher degree of professionalization, protection of clients, both sellers and buyers, prevention of undeclared work, due to which clients suffered great damage and were exposed to insecurity, and the level of fair competition was raised.
”Until the adoption of the law, intermediaries operated exclusively under the Law on Obligations, the Law on Companies and the Law on Crafts. There was a need to adopt a lex specialis that would more closely regulate the matter of mediation,” Edin Batlak, director of Agency Plus from Mostar, tells Bloomberg Adria.
Clear rules
He adds that the real estate industry is the largest industry everywhere in the world and there must be very clear rules about what is in the interest of all participants in the transaction: investors (sellers), buyers, intermediaries-agencies, the state and all other participants.
”Until the adoption of the Law, our country was the last country in the region without a legal market framework,” Batlak points out.
One of the main goals of the Law is the legal operation of real estate brokerage agencies, given that the market has so far been flooded with illegal agents who exposed buyers to risks.
”If all actors are diligent in implementing the Law, it is certain that we will see a reduction in the black market and the grey economy,” says Batlak.
He explains that the Law clearly distinguishes legal from illegal intermediaries. According to the provisions of the Law, every intermediary in advertising must state several key elements such as the name and address of the intermediary, the date and number of entry in the Register of Intermediaries at the Ministry of Trade of the Federation of BiH, the name and surname of the agent and the number of his personal license, and the number of the concluded Mediation Agreement between the principal and the agency.
“Anyone who has not listed all the above elements in an advertisement is engaging in mediation illegally and is in the grey zone. Only on the basis of that data can service users and inspection authorities very easily detect illegal intermediaries and act accordingly toward them,” Batlak adds.
In order to improve real estate transactions, the competent ministry, inspection authorities, advertisers, the Chamber and the Association of Real Estate Agents of the Federation of BiH and their members must be involved in the process.
“With the date of the start of full implementation of the Law, we established contacts with the largest advertisers in BiH, because they are a very serious link in the whole process and in distinguishing legal from illegal intermediaries who are colloquially recognized as ‘bag carriers’. In this area we already have certain progress, but we will continue to insist on the implementation of all our demands, because that is in the interest of all stakeholders,” Batlak emphasizes.
Agent education
When it comes to client protection, Batlak points out that permanent education and acquired knowledge confirmed in the examination cycle are the basis for the growth of professionalism in the profession, which will make legal agents recognizable and distinguish them from illegal ad hoc intermediaries.
“Every agent must have a good knowledge of property law governing ownership rights, construction and urban planning, because he must be able to explain the nuances of these areas to clients and not mislead them. For example, an agent must know how to read and understand public documents such as spatial and regulatory plans with construction regimes, and every piece of information given to the client must be accurate,” says Batlak, adding that otherwise the injured client has the right to compensation through a protest of the insurance policy in the first step, and then through the court.
Also, the agent must be familiar with financial operations through banks, tax policy, marketing, the regulations of our and other laws, all for the purpose of facilitating lawful real estate transactions.
For the improvement of real estate transactions, linking agencies into a special network will be of exceptional importance, which the Association is already working on, which will result in raising professionalism and multiplying income, as well as raising the reputation of professional agencies. Batlak also emphasizes that the focus must be on agent education.
”With the permanent education of today’s and future agents, business real estate transactions will gain exceptional importance and an adequate place in the economy. The high level of knowledge and organization of the Association of Brokers will open international networking, which will result in an inflow of foreign capital and be a driving force for the development of the real estate industry in Bosnia and Herzegovina,” Batlak concludes.
