Many in the real estate industry in Mallorca had already given up hope that the planned regulation of brokers in the Balearic Islands would ever be implemented. However, now, with the passing of the emergency law to combat the housing crisis on Tuesday (16.4.2024), the regulation is actually being introduced. This comes after four years of intense negotiations between the industry and various regional governments and with broad support from almost all parties.
The new rules officially came into force on 09.05.2024. Established real estate companies on the island hope that the new regulations will primarily eliminate unscrupulous competitors from the market, as they will not be able to meet the new requirements.
One of the new regulations states that brokers must now operate a publicly accessible office in the Balearic Islands. Even brokers who offer their services exclusively online must provide a postal address in the Balearic Islands where customers can submit complaints. Additionally, all brokers must register in a newly created registry. To be included in this registry, a university degree in fields such as law, engineering, or architecture is required. Brokers without this degree can alternatively prove their qualification through specific training courses or at least four years of practical experience. These training courses must comprise at least 200 hours.
These entry requirements could be particularly challenging for foreign brokers who come to Mallorca without language skills, as a degree or training must be completed in Spanish or recognized in Spain. In the future, the registration number of the respective company must be displayed on all advertising materials of the firm. Moreover, brokers must provide proof of liability insurance and deposit 60,000 euros as a guarantee.
Stricter regulations will also apply to sellers in the future. Owners must sign a contract with the broker. While this sounds obvious, it has often not been the case until now. Home sellers must also disclose all documents related to the property, including information on any illegalities. However, it is still unknown how the enforcement of these new measures will be carried out.