Renting and buying apartments through realtors: what are the consequences of the controversial bill

Аренда и покупка квартир только через риэлторов: чем грозит скандальный законопроект

New bill on real estate activities, which had registered the people’s deputies, may oblige Ukrainians to carry out transactions on purchase/sale of real estate only through realtors. In addition, it envisages the creation of questionable Federation of realtors that will be able to regulate the market and even set the price for services.

What provides for the bill and vote for his deputies? After serious resistance to the market and expert environment this paper began “to crumble”, and some MPs have already withdrawn their signatures.

What a bill: the official version

The authors declared the solution of two questions. The first is to protect the consumers from the “black” realtors who provide false information on the real estate, without incurring responsibility it is then.

The second is to bring the real estate market from the “shadows” and provide additional budget revenues.

“Can’t the country be a whole layer of people, who received not the money, but not responsible for it”, – stressed the head of the profile Committee and co-author of the bill Dmitry Nataluha.

What will the real estate bill for consumers and than threatens

According to the bill of buy (sell) or rent (lease) the property can be legal only through realtors. Its provisions exclude “unauthorized” transactions, although it is not stated in the bill napryamuu.

For the purchase or sale of realtors (not notaries) shall provide information on contracts assigning a unique number to a new service – a single database of information. Not registered in the database of real estate contracts will be void. The holder base will be newly created national Federation of realtors.

Also the database will automatically determine the value of the property, which will be recommended and indicated in the conclusion, along with information about the owner of the property, characteristics of the object and the passport.

The database will track history of the object, was entered if the assets in operation, was once on his arrest. Moreover, the creation of a body that will monitor the veracity of the information is not provided.

As you know, now also in parallel, a State register of real rights on real estate that already contains the data about objects of real estate in circulation.

New registry functionality is similar recently liquidated a database of evaluation reports – the people “site Yatsenko”. It also transferred regulation of the market to private individuals. The shadow of the schemes of the people’s Deputy group “For the future” Anton Yatsenko and then you will notice in the new initiative of parliamentarians.

Personally enter data into this service, and thus to enter into a formal agreement, the property owner can not, although that and violated rights of ownership under both the Constitution and the Civil code.

At the same time, the head of the profile Committee and co-author of the bill Dmitry Nataluha notes that it is not.

“The bill says that any other person authorised in accordance with the law (law in General) has the right to do it (a deal – Ed.) on their own, without the involvement of any intermediaries. If it were otherwise, it would be a violation of the Constitution, so this idea in the law is not laid down, it’s manipulation,” – says the MP.

Looking at other articles of the bill (e.g., part 4 of article 8 which we have partly quoted above), the author has the impression that the words of the MP are inconsistent with the text on paper. Probably the same impression arose and workers of the Main scientific expert Department Happy, who analyzed the document and found the risks of restrictions on the right of property owners to dispose of property.

This item is also analyzed by the experts of the League of antitrust and pointed to several provisions of the bill, contrary to the people’s Deputy.

But that’s not all. To advertise your property, for example on the website ads, will be impossible without a realtor, which previously had to pasportizovany object and make the base. To advertise themselves realtors or owners.

For failure to comply with this requirement, the bill provides for a fine of 47 thousand hryvnias.

So, in order to sell my apartment it will be necessary to contact the realtor and pay for his services, the pricing of which is still unknown.

Now the price regulates the market, for example, fees for rental property are usually in the 30-50% of the monthly fee, the sale fee starts at 1-2%.

The bill provides that the Council of public oversight, one of those government realtors who want to create, can set real estate agents for limits and fixed fee for the provision of services, but we don’t know what.

What is changing for realtors

Now the status of the subject real estate activity (broker) will be able to get a person over the age of 18, having completed secondary education and passed the qualifying examination (which will be taken by the Commission in the newly formed Federation).

The Federation will certify individuals, legal entities and submit them to your service – the Unified register of real estate activity. The Federation will be able to get a work permit to realtors for violation of professional duties, which itself will determine.

Federation will be able to take away the license of the realtor, even on the basis of anonymous complaints.

For the work “without papers” stipulated penalties from 8,5 to 17 thousand UAH with the confiscation of profits. Repeated violation will be punished from 17 to 34 thousand hryvnias also with the confiscation of profits.

The Federation will constitute a new unit of real estate government – public Union “national Federation of specialists in the sphere of real estate activity” and will not be subject to state agencies.

The actual creation of the Federation will start at the Congress of professionals-realtors, which can send one delegate from each employees ‘ Union.

These professional unions must be registered in the Unified register.

However, the law is no fuse from conventional organization of one-day “Beyond the platform” sent to the Congress a representative who will have voting rights. And these organizations can be a lot of catch up to ensure the desired solutions.

By the way, provided that the work in the Federation will be on a voluntary basis, they are free.

The idea of a Federation criticized from both outside and inside. The expert community is concerned about the monopolization of the controller and also with fuzzy power.

“All real estate activity becomes tough and much worse – fuzzy, rule: certification of certification additional qualifications. And to answer the already mentioned Federation”, – says the head of the analytical center “Institute for legislative ideas” Tatiana farm.

The MPs also note that the state after the adoption of the bill will not be able to control the industry.

“One of the important design spaces draft is the lack of a clearly defined government body responsible for control in this area, as well as companies that will carry out training of realtors and brokers,” commented the Deputy Chairman of the faction “servant of the people” Eugene Kravchuk.

Most market participants opposed the bill, which is with the market itself and are not discussed. Real estate organization has launched a petition to the President and addressed as the Committee and individual MPs.

For example, the Association of realtors supports the idea of legalization of the industry, however, described this edition of the bill as such, that carries significant risks for the market and gives the “spirit” of a controversial grounds.

“We, as real estate professionals, has never supported such an initiative, so the realtor was a mandatory element in the operations real estate – lease or purchase-sale. It’s a free market, and the customer chooses whether to work with a realtor or not,” – said the President of the Association in comments to the media.

At the same time, the bill was supported by the organization PARSA, the head of which, as of June 2020 in accordance with public data was Sergei Hmara, owner and Director of “VI AI PI Department,” the operator first authorized under the “site Yatsenko” service “Assessment Online”. Also “VI AI PI, the Department” has been associated with three similar sites of this scheme.

Who is the real initiator of the bill

Among the initiators – most of the members of the “public Servants”, including the heads of the various committees and the Deputy Chairman of Parliament Ruslan Stefanchuk. In addition, the list of signatories, representatives of EU solidarity, “Trust”, opzz and “Batkivshchyna”.

From the very beginning the document was signed by 32 MPs. Of these, 9 of the 11 members of the relevant Committee of Parliament that the meeting had, soon after the registration of the bill, recommending it to the first reading.

Subsequently, after public outcry the signatures of otovalo 4 “servants”.

In the list of sponsors there are members that are associated with “schemes Yatsenko” – Stepan Kubiv (EU) and Oleg Voloshin (opsi). Both in the past filed a lot of amendments in the bill 2047-d, and thus delayed the procedure for cancellation of scheme mandatory assessment of property.

The computer Voloshin was going the final version of the bill and all accompanying documents, which can be seen from the file’s metadata.

However, it is Stepan Kubiv, a source in Parliament familiar with the course of events, call the main proponent of the bill. According to him, the Cube knew that it was unlikely the bill with his “first” collaboration will receive support, so asked for help from the head of the financial Committee of the Verkhovna Rada Dmitry Natalukhi, which in turn has connected the members of the Committee.

“My opinion is to support the Chairman of the Committee and the signatories and to be based. Between the first and second reading to work the maximum number of things. Not to hurry, not to do a shortened procedure for consideration” – supported the draft law at the Committee meeting on 24 June, the people’s Deputy Stepan Kubiv.

A source said that the deputies do not very carefully studied the document and trust the authority of the signers and the overall motivation of the project. However, after the raised of “noise”, it was found that to support the bill fraction monopolista at all is going.

According to the source, in the intra-faction correspondence “servants” guide recommended not to support this bill and even asked to withdraw their signatures under it. The interlocutor from the Pro-government faction is sure that the “servants” of votes for 3618 will not give and even if the bill will make to the gym, where he does not receive support.

In addition, according to the Chairman of the Public Council under NACP Catherine Butko, the output of the anti-corruption authority bill will also be negative.

In this situation, the Chairman of the Committee of Nataluha remains the only public defender of the bill among the “servants” than gathers negativity.

What’s next

Member profile of the economic Committee and MP Voice Yaroslav Ruschishin believes that it is not necessary to wait for the bill.

“There is hardly any reason to talk about this (the bill – Ed) now, it would be a slap in the face to themselves. I think that you will find with the help of the rules, many other ways to get out of the situation.

The bill simply will not be put on the agenda and everything. This is sufficient to ensure that the story was forgotten, ” said Ruschishin.

At the same time this story opens the Overton window to discuss the legalization of the industry. The market is really big, and really lightly, which often suffer consumers.

“If we can get at least a little more secure agreements between consumers and realtors, we have to do it. We will hold consultations with the market, maybe we will change the model, perhaps they will advise us something different, because right now all divided into two camps,” explained the Nataluha in the television broadcast.

Most of those professionals are more satisfied with the bill “On brokerska activities” developed by the state property Fund in the year 2019, in which they proposed that the Committee pay attention. An alternative bill was proposed to control the market, not only government, but also the Fund itself, not introduce extra registers and does not “impose” the services of a realtor.

The Nataluha recently that it expects “extensive consultation with the market” and the adoption of the bill 3618 in the first reading in the autumn.

Chickens, of course, are hatched, but there is a feeling that on real estate regulation in a “hard” format, we are unlikely to hear in the near future.