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Eiendomsmegler (Norway)

  • Proportionality information

    1. Have you examined whether the requirements under your national legal system are
    directly or indirectly discriminatory on the basis of nationality or residence?
       Yes. Directive 2005/36/EC has been implemented in the Estate Agency Act, allowing a real estate agent legally established in a Member State to exercise – on specific conditions – this profession in Norway. Furthermore, Directive 2006/123/EC has been implemented in the Estate Agency Act as far as granting licence to carry on estate agency temporarily – on specific conditions – to persons legally established with such activity in another Member State.

    2. Which of the following overriding reasons relating to the general interest justifies the measure(s)?
    • Protection of consumers and recipients of services

    3. What specific risks or benefits have you identified that your measure(s) is designed to, respectively, minimise or maximise?

       Please try to be specific in describing the nature of the risks/benefits you have identified
       Where you have selected more than one overriding reason relating to the general interest in question 2 please be sure to address each of these in your response. Wherever possible please include evidence.

       It is a substantial difference between the nature of the activity of estate agency in Norway compared to the activity carried out by estate agencies in the majority of European countries. Norwegian estate agencies can to a large extent be compared with the European notaries, which also reflects the obligation for every estate agency to put up a security of € 3,5 millionø. It is also necessary to point out that the Norwegian real estate agent is an intermediary who has the responsibility to carry out the assignments with care for the interests of both parties. Duties within the scope of the agency: 1.Obtain an check property - information, present a wide range of mandatory information in prospect Risks which regulatory measures are designed to minimise: Insufficient/incorrect information communicated to buyer. The estate agent has an objective responsibility and can be sued foreventual damages incurred upon clients. Duties within the scope of the agency: 2.Negotiate between buyer and seller, set up a written contract of sale with all relevant conditions for the transaction. Risks which regulatory measures are designed to minimise: Estate agent fails to set up contract correspondent to what has actually been agreed upon. Neglecting basic, obligatory clauses. Duties within the scope of the agency: 3.The completion of the financial settlement. Receive the full purchase price. Totally in 2013 Norwegian real estate agencies received € 50 billion in client assets. Risks which regulatory measures are designed to minimise: Serious settlement errors, occasionally embezzlement of clients funds. Duties within the scope of the agency 4.The drafting and registration of the deed Risks which regulatory measures are designed to minimise: Failing to set up a correct deed or to register it properly Duties within the scope of the agency: 5.Application for concessions and other applications, declarations, or like Risks which regulatory measures are designed to minimise: E.g. misguiding buyers as to the complicated concession regulations What specific benefits that measures are designed to maximize: In Norway close to 80 % of the households own their homes. Estate agency activity in Norway has been under strict public regulation and supervision since 1931. The purpose of this regulation has been to ensure that buying and selling of property through the service of an intermediary is carried out in a secure, orderly and effective way, and to ensure that the parties in the deals in real property receive impartial services.

    4. How specifically do your measures operate to minimise the risk(s) or maximise the benefit(s) identified in question 3?

       When addressing this question please try to explain how the measures prevent the risks or guarantee the benefits.
       Where you have selected more than one overriding reason relating to the general interest in question 2 please be sure to address each of these in your response. Wherever possible please include evidence.

       Measures to minimise risks: 1. Ensure the admission to the estate agencies of personally qualified real estate agents, shareholders, boardmembers and CEO's, and certain requirements to the company running the estate agency business itself. The right to carry on estate agency requires license from The Financial Supervisory Authority of Norway. The estate agency must be financially solid, have insurance cover for the liabilities they may incur in their conduct of the business. Shareholders, members of the board and CEO's must pass a fit and proper test. The estate agents working in the estate agency must all have a personal license granted them on the basis of having passed an approved estate agents' examination, having the necessary practical experience, are solvent and whose conduct has been above reproach (must also pass a fit and proper test). 2. To ensure impartiality, the estate agency itself and its employees are not allowed to engage themselves in the property market doing transactions for a speculative purpose, and these are not allowed to buy or sell property through own estate agency. Furthermore, the estate agency is forbidden to engage itself in any other business which has no connection with estate agent activity. 3. The Estate Agency Act and regulations based on this act set a large number of directives for good estate agents' practice.

    5. In so far as you are able, please provide information that you have gathered regarding the concrete effects of the measure(s).

       For example, through impact assessments or information gathered during implementation or review of a measure. Member States who have recently undergone reforms may in particular be able to contribute helpfully to this field. Where you are able to provide cost-benefit analyses this would be particularly valuable.
       Information on whether the measures indeed successfully prevented risks from being realised (e.g. the number of sanctions imposed, a drop in transgressions since the measure was introduced or consequences from previous modifications of the regulation) would equally be helpful.
       Where you have selected more than one overriding reason relating to the general interest in question 2 please be sure to address each of these in your response. You may also wish to include evidence on consumer satisfaction or other measurements of the impact.

        As mentioned under 3), estate agency activity in Norway has been under public regulation and supervision since 1931. In spite of three reforms of the legislation on this area since 1931 - the last reform effective from 2008 – the evaluation of the effectiveness of the regulation of this profession has been positively evaluated at every occasion. This in the sense that strict measures are considered necessary in this special field to protect consumers from suffering losses and other grievances when they find it necessary to seek professional assistance due to the relatively complex transaction this is for most people when they are in the process of buying or selling property. For the majority there is not an alternative to take on the process of selling their own houses themselves. The demand for improving the estate agents' competence was a main topic in the last reform of legislation of the estate agency industry which resultated in a compulsory requirement for every estate agent to have a bachelor degree in estate agency or a master degree in law. Even if the estate agency industry in Norway is relatively severely regulated, the competition seem to function satisfactorily, something indicated by the high number of enterprises in this field and the relatively low transaction costs. Today there are approximately 500 estate agency firms registered, many of these have a significant branch network bringing the localities in Norway where estate agency services are offered to approximately 1 000. The total number of transactions in 2013 undertaken by these agencies and their branches were about 140 000, which gives an average of 140 transactions per office. An estate agency can demand remuneration only from the client from whom the assignment is received and on conditions agreed upon in connection with the assignment – usually a percentage of the purchase price (a commission). The average commission per transaction has been between 1,5-2 % during the later years, which can be considered not unreasonable compared to some countries on the European continent where the impression is of considerably higher commission and where the estate agent has a far less scope of responsibility. The estate agency industry is under the supervision of The Financial Supervisory Authority of Norway which is authorized to revoke the license of an agency or the personal license of a real estate agent. However, the general observance of the branch is that of law-abiding behavior. During the last 5-year period only 25-30 licenses have been revoked as a result of businesses or persons having grossly or repeatedly breached obligations pursuant to the rules - the majority of which have been personal licenses.

    6. Is the general interest objective you indicated in question 2 pursued in a consistent and systematic manner?.

       In approaching your response to this question please consider examples where you have addressed similar risks for comparable professions, not necessarily within the same sector. Is the approach you have adopted in this particular profession comparable or distinct from such similar cases and why?

       Within the scope of The Financial Supervisory Authority of Norway, the regulation of the debt collection industry and debt collector with a personal license to work in debt collection firms are similarly regulated for much the same reason, and with to a large extent, the same measures taken.

    7. Please explain in how far the degree of complexity or the nature of the activities
    which are reserved justify that these activities can be exclusively performed by professionals possessing a specific professional qualification?

       For example: when the tasks are essentially of a straightforward nature (such as preparing and printing pay slips etc.), or involve essentially the execution of instructions, specific professional aptitudes should not be required.

       This point is considered covered by the responses given above under 3) and 5)

    8. Where you have indicated several measures in place in the screening tab,
    have you reviewed the cumulative effect of all these measures on professional activities?

       If not, why not?
       If yes, please outline for us how you approached assessing this issue as well as the results and conclusions or any learning you drew from this. Where possible please include evidence.

       In general, as a part of the process of legislation and regulation, the procedure includes an evaluation of the economic and administrative consequences of the proposed changes. In this connection cost-benefit analyses are being carried through.

    9. Have you considered the use of alternative mechanisms to achieve your objective(s)?

       Please briefly explain. Where you have selected more than one option, please be sure to address each of these in your response.

       Use of alternative mechanisms has not been considered. ("Title protection" is already a part of the existing regulation.)

    10. Conclusion

       Following your internal examination of this regulated profession, which of the following have you concluded?

    •    Maintain current system

       Explain where relevant:

       Not relevant.

    11. Any other comments?
       No other comments.
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