Law Governing Real Estate Agents in Panama
Saturday, March 03 2007 @ 03:04 PM UTC
Contributed by: Don Winner
For the effects of Sales and Rental, the following are excluded from this definition. They are people who work as: Promoters, Administrators, Rent Collectors, Maintenance and similar.
Requirements: To become a Corredor de Bienes y Raices and qualify for a license, you must:
- Pass an exam administered by the Ministry of Industry and Commerce
- Obtain a bond in the amount of $10,000 per year
- Obtain Power of Attorney, presented by an attorney to a notary public
- Pay Fiscal Stamps (Timbres Fiscales) yearly of $25.00
- In addition, all solicitors of the license for Corredor de Bienes Raices must be:
- Panamanian nationals or foreigners with 5 years legally established residency
- Police Record stating you have never committed a felony against; the nation, public faith, the admission of justice, honor.
Governing Body; The Junta Tecnica de Ministerio de Commercio y Indistria (Technical Board of the Ministry of Industry and Commerce) is the governing body over Corredor de Bienes Raices and has the following functions:
Receive and Review the documentation from solicitors of the license
Ensure compliance – provide continuing education programs
Adopt Code of Ethics
Approve, program and regulate the exams
Receive and grade exams
Dictate internal order
To legally receive a commission on the sale or rental of a property, one must have a license.
Sanctions Imposed: All individuals who operate without a license, can be imposed a fine of $10,000 per incident.
Republic of Panama – Law 002-2001 of July 25, 2001
Establishes the creation of the code of ethics for Corredors (Brokers) of Real Estate.
Law 6 of July 8, 1999 (which creates the profession), in Article 10 Numeral 3 stipulates that: Functions of the Junta Tecnica de Bienes Raices (Technical Board of Real Estate) are to adopt a Code of Ethics for the profession.
In session, July 25, 2001, the Junta Tecnica approved the text presented by different associations.
Title 1 – The Disciplinary Regimen
Chapter I – The Norms Of General Conduct
Comply with the current laws of Panama and the resolutions and requirements of the Junta Tecnica.
Article 2: A Corredor of Bienes Raices (Broker of Real Estate) will possess a license that is to be issued by the Junta Tecnica.
Article 3: A Corredor should act in good faith in dealing with their contractors (buyer and or seller), and inform them of all the factors that affect the property as it relates to: Sales, Contracts, Zoning, Financing, Any other matter in relation to the activity of Real Estate.
Article 4: Corredors must make sure their actions are completed within an enthusiastic practice and professional manner that strengthens the sentiment of overall solidarity. They should avoid all illegal practices, practices of fraud or scams, in relation to the ethics of other colleagues and third parties.
Article 5: They should avoid: Fraud, False Representations, Misleading Advertising, Exaggerations, and Malicious Practices - that can damage the public and the image of the profession.
Article 6: Do not offer or announce, a property without previous authority to do so.
Chapter II – Relations With Clients
Article 7: The Corredor should verify and ensure that the property or business contains the essential requirements for the future validation and initiation of a contract.
Article 8: Confidentiality will be maintained over the information the client provides.
Article 9: Never offer properties at a greater price than the pact agreed with the client, unless that pact has been stated in writing with the owner or client explaining the change.
Article 10: When there is interest on behalf of the Corredor to buy a property to which they have been given the right to show, they must inform the client of their interest.
Article 11: A formal offer presented by a client must be relayed to the owner immediately for their consideration.
Article 12: In order to approach two or more people for the initiation of a deal, it should be taken into account that: The Corredor must have the approval of the owner to receive a payment. The Corredor must have the approval of the owner to receive a payment as deposit.
Article 13: All previous representation will be respected in the event of sharing a client with another Corredor. There should be no solicitation for cooperation from a third party without approval from the other Corredor.
Article 14: The rights of other colleagues will be respected in relation to a property owner or client, until their business is concluded.
Article 15: It is important to maintain good relations with your colleagues as it relates to the avoidance of taking advantage of a situation, or unjustifiably discrediting another Corredor.
Article 16: Signs stating “For Sale” or “For Rent” should be respected when there is exclusive authorization in writing, and another Corredor should not place similar signs. It is prohibited to remove any sign posted on a property by another Corredor. A solicitation must be made to the owner for the owner to remove any sign placed by another Corredor.
Article 17: Commissions and payments between two Corredors should always be based on terms agreed to previously, to avoid disputes. In the absence of written agreement, the total commission will be divided in two equal parts: between the Corredor, the seller, and their group, and between Corredor, the buyer, and their group, if such groups exist.
Article 18: The principles of a free market will guarantee excellent service to clients. Relations between colleagues will be based on equity and mutual respect, to assure that no Corredor can utilize falsehoods to demerit, or discredit another colleague.
Chapter III– Professional Fees And Honoraries
Article 19: All negotiations between a Corredor and their client will be in writing to avoid doubts and conflicts. Verbal contracts between a Corredor and their client will be considered valid as it relates to the application of payments for commissions.
Article 20: If no previous contract exists between a Corredor and their client, the Corredor should never try to charge for commissions or fees for their professional services that are outside of the customary rates.
Article 21: The minimum tariff will be 5% of the final selling price of a property, and a sum equivalent to one months rent in the case of a rental property.
Article 22: In transactions that involve two Corredors, one Corredor cannot unjustifiably retain the part of the commission that corresponds to the other, unless there is a previous contract that states this.
Chapter IV– Ethics Tribunal
Article 23: Accusations of disloyal competition are to be evaluated by the Junta Tecnica or the Ethics Tribunal, through written correspondence.
Article 24: The Ethics Tribunal will ensure that this law is followed, and enforced.
Article 25: The Ethics Tribunal is facilitated and empowered to sanction and ventilate (inform).
Article 26: Third party mediation is allowed provided the two parties agree.
Article 27: Lack of Ethics include: Violations of the present Code of Ethics, Giving client information to one Corredor without the previous consent of the other Corredor, Initiating contact with a client previously presented by a colleague, without their authorization (exchange your business card, send letters, proposals, etc.), Not sharing the customary commission with a colleague who helped you realize business with a client.
Title II – Disciplinary Regimen
Chapter I – General Norms For The Regimen Of Discipline
Article 28: The violation of norms and ethics, independent of the civil or penal responsibilities or damages created by the act committed, subject the Corredor to disciplinary sanctions established in this law and subsequent special modifications to the law.
Article 29: Accusations made against another Corredor, must be presented before the Junta Tecnica in writing.
Article 30: Disciplinary Sanctions of this law are the following: A verbal reprimand in private, A written reprimand in private or public, Suspension of the Corredor’s license, Cancellation of the Corredor’s license.