Croatia proposes law to stop real estate agents charging double commission

Croatia is set to implement a new law aimed at increasing transparency and protecting citizens involved in real estate transactions. The proposed "Law on Mediation in Real Estate Transactions" introduces stricter regulations for agents, addressing issues like double commissions and mandatory contract signings before property viewings.

State Secretary Ivan Rakocija explained that the law explicitly forbids agents from charging both buyer and seller full commission. Instead, each party can be charged a maximum of 50 percent of the total fee outlined in the brokerage agreement. Furthermore, agents can no longer condition property viewings on the signing of a mediation contract, a practice Rakocija called "unacceptable."

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This law protects the buyer. It prohibits conditioning property viewings on signing a mediation contract. It is unacceptable to ask a potential buyer for a signature and commission just to enter a property that the agency has already contracted and advertised on behalf of the seller.

"This law protects the buyer," Rakocija stated, emphasizing that requiring a signature and commission simply to enter a property is not permissible. The legislation also aims to professionalize the industry by requiring agencies to employ at least one full-time agent, combating "phantom brokers."

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For most citizens, buying property represents the biggest financial investment in their lives. That is precisely why the state has a duty to ensure that this process is as safe and transparent as possible and free from any manipulation.

Additional measures include strict rules against advertising properties without a signed owner agreement and the mandatory display of transparent price lists. Penalties for violations will be significantly increased, ranging from 3,000 to 30,000 euros, and mandatory insurance for damages will be raised to at least 100,000 euros per incident and 300,000 euros annually.

While the government champions the law as a safeguard for what is often citizens' largest financial investment, some opposition members argue it doesn't go far enough. Boris Piližota of the SDP club acknowledged the positive steps regarding viewings and insurance but stressed that buyers, as the weaker party, should be at the absolute center of legal protections.

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The buyer must be at the center of protection and at the center of the bill's proposal.