The Ministry of Economics has compiled the 2023 supervision results for real estate transaction intermediaries (brokers), concluding that the majority of brokers registered in the real estate transaction intermediary register conscientiously observe the obligations set out in the regulatory framework – they have insured their civil liability and have completed professional development within the specified timeframes, thereby demonstrating their professionalism and diligent attitude towards clients, other industry operators, and the state.
As of 31 December 2023, there were 763 ACTIVE intermediaries registered in the real estate transaction intermediary register in total; this includes 199 new intermediaries registered during 2023. In 2023, a total of 162 intermediaries were removed from the register, including:
- 2 whose business activity was suspended by a decision of the State Revenue Service;
- 5 companies that were liquidated;
- 69 who were removed based on the intermediaries' own applications;
- 86 intermediaries who were removed due to failure to complete professional development.
To re-register in the real estate transaction intermediary register, an intermediary must submit an application to the Ministry of Economics, an insurance policy, documents confirming the completion of professional development measures, and pay the registration fee. Please be informed that from 2024, the State Treasury account number to which intermediaries must pay registration or supervision fees has been changed to: LV27TREL8120038041000.
The Ministry of Economics reminds that for the illegal provision of services (i.e., without registration in the real estate transaction intermediary register), the State Revenue Service may impose an administrative penalty on real estate transaction intermediaries – a warning or a fine of up to 500 EUR for a natural person, and up to 8000 EUR for a legal entity. We draw your attention to the fact that a natural person can only register in the real estate transaction intermediary register if the person has registered their business activity with the State Revenue Service.
We also remind you that in 2023, following amendments to the Real Estate Transaction Intermediaries Act, requirements for the activities of real estate transaction intermediaries in Latvia were strengthened, ensuring more effective supervision of the professional activities of these persons, promoting the provision of stable, secure, and reliable intermediary services, as well as helping to reduce the shadow economy in the sector.
The amendments to the Act establish an additional mechanism for restricting the activities of real estate transaction intermediaries who have not completed professional development during the calendar year. The Act includes a provision that, in the event a real estate transaction intermediary has not fulfilled professional development requirements, then after being removed from the real estate transaction intermediary register, the real estate transaction intermediary will have the opportunity to be reinstated in the register if the requirements regarding professional development measures are met.
The Act has also been supplemented with a provision that imposes an obligation on a real estate transaction intermediary to undertake a professional development measure if their removal from the real estate transaction intermediary register was based on the intermediary's own application, stipulating that the professional development measure must be completed if the real estate transaction intermediary wishes to register in the real estate transaction intermediary register again.
As is known, since August 2020, the Real Estate Transaction Intermediaries Act has regulated the legal basis for the professional activities of real estate transaction intermediaries and ensures the supervision of the professional activities of these persons in order to prevent the laundering of proceeds from crime, terrorist and proliferation financing, and to promote the provision of stable, secure, and reliable intermediary services. The Act stipulates that a real estate transaction intermediary must insure their professional civil liability. Cabinet of Ministers Regulation No. 602 of 29 September 2020 “Regulations regarding the civil liability insurance of the professional activities of a real estate transaction intermediary” determines the minimum annual liability limit for the insurance contract and the mandatory risks that a real estate transaction intermediary must insure. At the same time, the Act provides that from July 2021, only persons included in the Real Estate Transaction Intermediaries Register may provide intermediary services. The register is publicly accessible on the Ministry of Economics website.