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The Ministry of Economics has summarized the results of the supervision of real estate transactions brokers (real estate agents) in the first half of this year, concluding that the majority of brokers registered in the real estate transaction brokers register diligently adhere to the duties specified in the regulatory framework. They have insured their civil liability and have raised their qualifications within the specified deadlines, demonstrating their professionalism and honest attitude towards clients, other industry participants, and the state.

As of July 1st, a total of 775 brokers are registered in the real estate transaction brokers register, including 120 new brokers registered from January 1st to July 1st. During the same period, 70 brokers were removed from the register, including:

• 40 removed based on their own applications;
• 2 brokers ceased their real estate transaction brokerage business;
• 2 brokers were liquidated;
• 26 brokers were removed due to not obtaining qualifications.

To re-register in the real estate transaction brokers register, brokers must submit an application to the Ministry of Economics, along with an insurance policy, documents proving the completion of qualification-raising measures, and pay the registration fee.

The Ministry of Economics reminds that the State Revenue Service can impose administrative penalties (warnings or fines) up to 500 EUR on individuals and up to 8000 EUR on legal entities for providing illegal services (i.e., without registration in the real estate transaction brokers register).

LANĪDA advocates for a well-organized industry operating on legal grounds and the highly professional operation of companies that ensure safe transactions and an ethical culture of communication. LANĪDA emphasizes the importance of fair competition, transparent transactions, and taxes paid to the state budget. The data from the brokers' register indicates that the association's collaboration with the legislator and the Ministry of Economics has finally yielded tangible results in organizing the industry. The new amendments to the Real Estate Transaction Brokers Law mark a new stage in restricting the activities of illegal brokers, allowing sanctions to be applied to those who have previously ignored legal requirements. The goal is for the real estate transaction industry to emerge from the "shadow zone," with brokers becoming a respected profession and transaction participants reliable partners, not adversaries, says Aigars Šmits, Chairman of the Board of the Latvian Real Estate Transaction Association (LANĪDA).

As previously reported, this year, with amendments to the Real Estate Transaction Brokers Law, additional requirements for the activities of real estate transaction brokers in Latvia have been introduced, ensuring more effective supervision of their professional activities, promoting stable, secure, and reliable brokerage services, and reducing the shadow economy in the industry.

With the amendments, a mechanism has been introduced to restrict the activities of real estate transaction brokers who have not raised their qualifications during the calendar year. The law now includes a provision that if a real estate transaction broker has not met the qualification-raising requirements, after being excluded from the register, there is an opportunity to be reinstated in the register if the qualification-raising requirements are met.

The law has also been supplemented with a provision that imposes an obligation on real estate transaction brokers to undergo qualification-raising measures if exclusion from the register has been based on the broker's own application, specifying that qualification measures must be taken if the broker wishes to re-register after exclusion.

It should be noted that the existing regulations also previously stipulated that real estate transaction brokers must be included in the register and participate in qualification-raising measures annually. If a broker had not raised their qualifications, the existing regulation required excluding the broker from the real estate transaction brokers' register. However, the regulation did not include a requirement to raise qualifications if the broker wanted to re-register after exclusion. This led to a situation where real estate transaction brokers often deliberately ignored the requirement to attend qualification-raising measures.

As previously known, on August 1, 2020, the Real Estate Transaction Brokers Law came into force, regulating the legal basis for the professional activities of real estate transaction brokers and ensuring the supervision of their professional activities to prevent money laundering, the financing of terrorism and proliferation, and promoting stable, secure, and reliable brokerage services. The law stipulates that real estate transaction brokers must insure their professional liability. On September 29, 2020, the Cabinet of Ministers adopted regulations No. 602, which set the minimum liability limit for the insurance contract and the mandatory risks that real estate transaction brokers must insure. At the same time, the law stipulates that from July 1, 2021, brokerage services may only be provided by persons included in the Real Estate Transaction Brokers Register. The register is publicly available on the website of the Ministry of Economics.