The time for accredited property consultants has finally come
All property consultants in Malta now are required to obtain the necessary accreditation.
The buying, selling, renting, or letting of property is no longer the simple process of yesteryear: gone are the days of a deal sealed with the nod of the head or a simple handshake.
In today’s international cyber society with its borderless banking, hackers, money laundering, and corruption, “due diligence” is the new watchword. The responsibility of enforcing due diligence is also no longer the exclusive duty of the bank or the notary, but now also required as a step to be undertaken by the estate agent. Says Douglas Salt, the Director of Malta’s Frank Salt Real Estate Group: “All parties now have to work together on any given property transaction. Everyone has a legal responsibility, as contained by law, to make sure the whole process from start to finish is a very legal one.”
Representation from the legal owner’s side can take the form of either a professional appointed agent handling the transactional on the behalf of the owner or the owner can handle the transaction themselves (this always involves elements of risk because the owners may well have the best of intentions by doing this themselves but not necessarily have all the experience and knowledge of all the processes and legalities presently involved).
In the case where the owners of a property decide to handle the transaction themselves, it could turn out to be a nightmare and end badly. Dealing with all property matters is time-consuming and complex. Unless you are an estate agent, it is not one’s primary core business. The takeaway from this is that in today’s property market one cannot afford to make any mistakes, as the implications will be severe – both financially and legally.
This is where one’s wisest decision is to appoint a tried and trusted property consultant or reputable real estate company to act on your behalf. The benefits derived from making this decision are far-reaching and always expedites the whole process besides the fact that property owners are assured of a sound night’s sleep, knowing that from that moment on their best interests will be well taken care of by a certified expert.
The modern estate agent is required to be far more than just the emissary of the past who simply used to act on instructions from the parties involved. Maltese law now requires that estate agents and property consultants, as from the end of 2021, are to be legally qualified, accredited, and licensed to operate and there are several important reasons for this. Any person dealing in property sales and letting from now on are expected to:
- Have full knowledge of the latest legislation regarding The Prevention of Money Laundering Act.
- Have full knowledge regarding all the latest property transaction laws.
- To be trained in all aspects regarding fair representation of any parties.
- To uphold a code of ethics as determined by law and the industry itself.
- To be knowledgeable about all aspects of the conveyancing process including the Promise of Sale, The Sale Agreement, and the Transfer of Property Contract or Agreement.
- Has experience in interacting with notaries and to have a general knowledge about their role and responsibilities towards any clients.
- Understand the impact of the real estate industry on the Maltese economy.
- Have full knowledge about the different categories of real estate classification to be found in Malta.
- Have knowledge about financing options available to clients.
- Know and understand the principles of the Data Protection Act when it comes to the rights of clients.
- Be able to relay and explain the role, involvement, and workings of any government departments involved in any of the property processes.
- Have a full understanding of what sound financial investment principles are and to act in the best interest and protection of any client.
- Understand and to be able to qualify different client personality types and relate to them.
- Have knowledge and access to avenues of knowledge when it comes to appraisals and calculations regarding anything related to a property transaction.
- Be able to not only interpret but explain to clients the complexities of technical drawings, blueprints, and plans, specifications, and details.
- Be able to advise clients on tax implications and all possible liabilities.
- Be able to explain to clients any basic returns on investments.
- Be in full knowledge and able to explain to clients all costs involved in property transfers.
- Be obliged to report any suspicious financial activities to the relevant authorities.
- Have excellent knowledge about market trends and associated data and be able to relay and explain this to any clients in a way they can easily understand.
- Have absolute knowledge about all legal phrases and processes and be able to explain this to clients.
- Have an expert opinion and knowledge on how a client should go about buying, selling, or letting a property.
- Be an expert in liaising between clients, architects, notaries, the deeds office, or any other professionals involved in any of the processes.
- Go out of their way to provide the best and honourable service pre- and post the whole process to all clients and parties involved.
If one takes into consideration that these are just some of the complexities involved in dealing with any aspect of the property market, it is no wonder that the time eventually arrived for the Maltese Government, in association with Malta’s leading real estate companies like Frank Salt Real Estate, to formalise this very important industry.
The market is eagerly awaiting the outcome and effect of this decision, raising the bar, for the whole industry. What spearheaded the whole initiative was the enormous amount of continued negative press and lack of positive sentiment estate agents have endured from the general public the last few years. There were simply too many shady deals, disappointed clients and money laundering activities associated with real estate transactions to ignore and something drastic had to be done.
After several years of lobbying and inviting comment from the industry on White Papers submitted and drafted by Government, the law now requires that all estate agents need to obtain a formal education and training to eventually qualify after receiving the acknowledged accreditation. To obtain this certificate in Real Estate, a minimum of 8 ECTS at level 4 of the Malta Qualifications Framework, attained from a recognised training institution licensed by the National Commission for Further and Higher Education, is mandatory before anyone can now operate as an estate agent. This applies to any person selling more than 2 properties per year and thus affects more than 2,500 estate agents currently operating and working in Malta.
A leading example of turning around a negative tide comes from the South African property market, where similar legislation was introduced in 2011. With very strict criteria, newcomers to the real estate in that country are obliged to first complete a 12-month internship under the watchful eye of a fully qualified agent, secondly, keep a log-book of all their activities and they then have to write the required exam before they themselves qualify as a fully-fledged estate agent. This is after they have also done a course similar to Malta’s offering. They are then awarded NQF Level 4 and the title of PPRE (Property Practitioner, Real Estate). This all takes place under the governance of the South African Estate Agents Affairs Board, a body who has a tough set of rules and code of conduct for all its members. If one is not a licensed member of this institution with a certificate in hand to prove it, once can simply not operate and sell property in South Africa. All estate agents there also contribute towards the South African Estate Agents Affairs Board’s Fidelity Fund so that the interests of buyers and sellers are financially protected and that the latter have an avenue of financial compensation available to them in case they suffer any financial losses incurred by them due to unscrupulous actions of any of its members.
We spoke to the Human Resources Manager of one of South Africa’s biggest real estate groups, Ronel Bornman, to get her opinion on what the effects of this formal training and compulsory qualification process for all agents has had on the local industry. She believes that “Institutionalising the formal requirements for real estate practitioners or agents had a tremendous, positive spin for the industry as a whole. It has brought respect, restored the reputation of its professionals, and instilled much-needed credibility at a time when the outlook was grim”. Bornman is a consummate property professional with more than 30 years of experience in training South African estate agents.
The eventual outcome of Malta’s introduction and subsequent enforcement of legislation for all real estate practitioners is expected to have a similar positive effect after some time: elevating estate agents to unparalleled levels of professionalism and ethical conduct and protecting the interests of all of its clients. This will surely take this once frowned-upon trade into the realm of expertise and unquestionable professionalism.
This bodes extremely well for Frank Salt Real Estate and its sister company Home of Quality. With over 90% of their entire contingent already qualified as required by the new laws, the two estate agencies are prouder than ever that this formal training now underscores their already flawless reputation of trust and professionalism gained over the past more than 50 years.
Real estate remains a key pillar of the Maltese economy and despite the devastating effects of Covid-19 on tourism and the influx of foreign workers wanting properties to rent or purchase, sales have remained at record-breaking levels throughout the pandemic up to now. Says Douglas Salt: “According to statistics from globalpropertyguide.com, Malta’s property market saw a year-on-year average growth rate of 5.4% from March 2001 to June 2020 and a rental yield of 3.37% per annum at present. Combine this fact with the annual increase in basic building costs and global population growth and one cannot but acknowledge that property is always in demand, always more expensive… whether times are good or bad. People always need a roof over their heads, no matter what their income group may be and therefore there will always be a much-needed role for any good estate agent to play”.
“When joining the Frank Salt Real Estate family, you can look forward to excellent in-house training, several salary-based options, constant sales leads, national and international marketing exposure, and the freedom that comes with being an estate agent.” Adds Darren DeDomenico, Director at Frank Salt Real Estate responsible for training.
For more information about what Frank Salt Real Estate has to offer to prospective property consultants, one can visit www.franksalt.com.mt/champion