New legal ruling on real estate registration in Comunidad Valenciana: what it means for professionals

A recent ruling from the Tribunal Superior de Justicia of the Comunidad Valenciana has introduced significant changes to the regulatory landscape for real estate professionals operating within the region. This decision, which partially annuls certain provisions of the Decreto 98/2022, affects the registration requirements for real estate agents and agencies. Here is an overview of what this ruling entails and its implications for those in the sector.
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What was the law before the ruling?

Prior to this ruling, Decreto 98/2022 mandated that all real estate agents and agencies operating in the Comunidad Valenciana register with the official regional registry. This applied to both local agents and those from other parts of Spain and the European Union (EU). The law imposed strict requirements related to professional qualifications, solvency guarantees and having a physical office within the region.

What does the new ruling change?

The court ruling has annulled several key provisions of Decreto 98/2022, specifically:

  • Physical presence requirement: Real estate agents offering services exclusively online were previously required to have a physical office or address in the Comunidad Valenciana. The court has annulled this, meaning online agents from other regions or EU countries can operate without this requirement.
  • Professional qualification requirement: The ruling has annulled the mandatory proof of specific qualifications for registration. Previously, agents had to demonstrate specific academic credentials or certifications to register.
  • Solvency requirements: The court annulled specific solvency guarantees and insurance amounts that were mandatory under the original decree.
  • Registration for non-resident agents: Agents from outside the Comunidad Valenciana (from other regions of Spain or the EU) are no longer required to register in the regional registry if they are compliant with general national or EU standards.

Who still needs to register?

Despite these changes, real estate agencies based within the Comunidad Valenciana are still required to register with the regional registry. The annulled provisions primarily affect agents and agencies from outside the region, allowing them more flexibility to operate without additional administrative burdens.

Implications for real estate professionals

  • Local agencies: Agencies based in the Comunidad Valenciana must still comply with the regional registration requirements. This means local agencies continue to meet higher standards for qualifications and solvency compared to those from outside the region.
  • External agencies: Agencies from other Spanish regions or EU countries now have easier access to the Comunidad Valenciana market, as they are not bound by the same registration requirements. This could increase competition within the region.
  • Clients and consumers: While the ruling may simplify operations for external agents, clients may face varying standards of professionalism depending on whether they are dealing with a registered local agent or an external, unregistered one.

The importance of professional training and ethical standards

While legal requirements for registration and qualifications may have been relaxed for certain agents, the importance of professional training and ethical conduct remains paramount. Real estate transactions often involve substantial financial commitments, frequently amounting to hundreds of thousands of euros. Agents play a crucial role in these transactions, even with the involvement of lawyers and notaries.

At FEI Business School, we believe that comprehensive training and adherence to ethical standards are not merely about meeting legal requirements. They are essential to ensuring that clients receive the highest level of service and protection, regardless of regional laws. Proper education equips agents to navigate complex transactions, safeguard client interests, and uphold the integrity of the real estate profession.

Conclusion

This new ruling introduces a more flexible operating environment for external real estate agents in the Comunidad Valenciana. However, the commitment to professionalism, training, and ethical conduct remains the cornerstone of a trustworthy real estate sector. Whether legally required or not, these principles are vital for maintaining high standards and ensuring client confidence in every transaction.

The original ruling in Spanish is available directly from the TSJCV here.

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