DAMIR BORIĆ, President of Group of Real Estate Brokers at CCIS’s Trade Association – THE MARKET NEEDS TO BE FURTHER EDUCATED

The prognosis is that networking of real estate brokers to make bigger systems with the view of ensuring economy of volume would have to come soon


Since 2007, brokers as-sembled in profession-al associations have been actively working towards regulating the market with a special emphasis on proposing legislative arrangements. Brokers, gathered under the professional associations of Real Estate Cluster and the Group of Real Estate Brokers of Serbia adopted the Code of Ethics of Real Estate Brokers.

The Assembly of the Chamber of Commerce and Industry of Serbia (CCIS) has adopted the Code of Ethics of Real Estate Brokers. How much can this act contribute to elevating the professional work in this sector?

— In performing a brokerage business, the Broker is obliged to act conscientiously and honestly, in accordance with the Law, other regulations and good business practices, to earn trust by protecting the interest of the principal and the third party, to act impartially in order to do the job, while taking into account the dignity of the brokerage business, as well as to elevate the level of professional know-how of their employees who perform brokerage activities.The Code has been in effect since July 7, 2019, and sets out the basic ethical principles and norms of professional behaviour of brokers in the sale and lease of immovable property. The Code’s are binding for the brokers operating in Serbia, who have accept-ed the Code.

The brokers are obliged to inform their employees to the Code’s provisions, is responsible for compliance with the Code’s and is bound to show the Code on their official websites.What kind of protection do the Code and the Group offer to brokers?

— In terms of supervision and implementation of the Code, the Group of Real Estate Brokers monitors the implementation of the Code. A Commission was appointed to examine whether the brokers who acceded to the Code are following its provisions. The Commission has the authority to examine whether a broker operates in line with the Code, or contrary to its provisions. If the Commission finds a violation of the Code’s provisions, the Commission shall file an application to initiate proceedings against the broker at the CCS’ Court of Honour, or breaching good business practices and business morality in business relations.

What changes do the future amendments to the Law on Real Estate Brokerage Services bring in terms of regulating the working status of the broker?

— Since the adoption of the Law on Amendments to the Labour Law, which erased Article 200 of the Labour Law, the engagement of agents, which was usual practice in real estate brokers, is now made impossible. Concluding a job contract, which is currently the only working form of agent engagement, leads to higher costs of brokerage operations and is contrary to the nature and practices of this industry. Most agents expect to receive an appropriate percentage of a brokerage fee for their work, but this has been rendered impossible based on the job contract due to excessive tax burden and salary contributions. For many agents, performing the job of a real estate broker is an additional activity.Therefore, it is necessary that the amendments to the Law on Real Estate Brokerage Services deter-mine the method of engagement of agents by business entities/real estate brokerages registered with the Registry of Real Estate Brokers, i.e. to define the possibility of concluding an agreement on representation with persons who have passed the professional real estate brokerage exam. This would regulate the status of between 800 and 1,000 agents in the first year of implementation of the regulation, which would significantly reduce the shadow economy in this segment.

How widespread is the network-ing of real estate brokers to make bigger companies to ensure the economy of value?

— Unfortunately, we are at the very beginning regarding this issue, that is, such processes have not even started. The fact is that there has been a fragmentation or decommissioning of some major real estate brokerages. This process had to take place considering how disorderly and chaotic the real estate market has been, as well as due to broker-ages hiring uneducated workforce until the Law Real Estate Brokerage Services was passed. The process has been lasting for too long. The prognosis is that networking of real estate brokers to make bigger systems with the view of ensuring economy of volume would have to come soon since we are already feeling the consequences of the defragmentation and certain individuals would not be able to keep up with the market game considering how many responsibilities and obligations they have as the participants in the real estate brokerage market, regardless if they are registered as entrepreneurs or companies.

How much is the Chamber of Commerce and Industry of Serbia’s Group of Real Estate Brokers involved in building an institutional framework that would facilitate the development of the real estate sector?

— At the initiative and with active participation by the Real Estate Cluster and the Group of Real Estate Brokers of Serbia, the Law on Real Estate Brokerage Services was passed in 2013 while the relevant bylaws were passed in 2014. It should be noted that this regulation also stipulates the Registry of the Real Estate Brokers contain-ing the information on all persons who passed the real estate broker-age exam. This Registry is publicly available on the official website of the Ministry of Trade, Tourism and Telecommunications. Representatives of real estate brokerages have been actively participating in educating the Registry’s members regarding the implementation of the Law in practice and adherence to its stipulations. They told the management of State Market Inspection that they were unreasonably assessed as high-ly-vulnerable in relation to other non-financial sectors by being classified as „a medium-high risk group “. These two associations along with the Chamber of Commerce and Industry of Serbia have been educating real estate brokers since 2009, while since 2014, more than 1,500 persons attended training. Also, the representatives of both associations have participated in creating the updated National Assessment of Money Laundering Risk in Serbia, as well as in the implementation of the activities relating to the Action Plan of the Council of Europe Committee called Moneyval and the ICRG Working Group.

How much is the shadow economy present in the real estate sector and what kind of solutions can diminish it?

— The volume of the shadow economy in Serbia is today at a much lower level than five years ago, but it is not in line with the expectations. Shadow economy did dimish following the adoption and implementation of the Law on Real Estate Brokerage Services, the bylaws, improving the business environment and macroeconomic stability, labor market recovery, improving the work of inspections, harder penal policy and more efficient collection of taxes. It is necessary to finish the net-working of electronic databases of the Business Registers Agency, the Tax Administration, inspection bodies and others as soon as possible, to be able to promptly deal with all those people who violate the laws. Special attention should be paid to the control and supervision of business entities in terms of hiring persons outside the legal framework, as well as individuals who perform business activities but are not registered with the Business Registers Agency and the Tax Administration. We would especially like to highlight the need for the continuous education of all market participants, especially buyers and sellers. We are underlining this because both buyers and sellers oftentimes avoid using the registered and licensed real estate brokerages under the pretense that they „save“ money this way and don’t have to pay brokerage fees. Both buyers and sellers often resort to the use of unregistered brokers operating in the grey or the black zone, thus doing themselves a disservice by failing to receive quality services and, in the majority of cases, having to pay much more in the long run.

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