A new law introducing a legal framework to the currently unregulated profession of real estate brokers is likely to be enacted by the end of 2017.


Unlike in most European countries, in the Czech Republic the activities of real estate brokers are not subject to any special legislation. This has led to persistent problems which Czech lawmakers plan on tackling by introducing a new Act on the Provision of Services by Real Estate Brokers (the “Broker Act“). Although the Broker Act has not yet been adopted, the Czech government has put forth a legislative proposal representing a material basis for the future Broker Act (the “Proposal“). While the Proposal does not yet contain specific normative rules, it does address the most serious deficiencies in the status quo and provides an outline of the content of the Broker Act. In addition to introducing the Broker Act, the Proposal also contemplates corresponding amendments to the Trade Licensing Act, the most significant of which are summarised below.

Qualification requirements for provision of real estate brokerage services

Although profound knowledge of the laws regarding property ownership and its transfer are essential for the provision of adequate real estate brokerage services, currently any-body fullfiling the precondition of legal age (18 years and older), and who does not have a criminal record, may apply for a trade licence in order to provide real estate brokerage services to others. Under the Proposal, the conditions for granting a trade licence will be divided into two groups, which depend on the scope of brokerage services provided. If the applicant merely wishes to provide (i) assistance during the purchase of real estate for the purpose of its further sale, (ii) assistance during the sale of real estate, or (iii) administration/maintenance of real estate, then a licence shall be granted under the cur-rent requirements (being of legal age and having no criminal record). If the applicant wishes to provide further brokerage services, he or she must also demonstrate relevant professional competences, eg by passing a qualifying test or by providing evidence that he or she already has long-term experience in the field.

Compulsory liability insurance

Unlike attorneys, insurance brokers and tax advisors, real estate brokers are not required to conclude mandatory liability insurance. The Proposal requires real estate brokers to conclude an insurance policy with liability coverage of at least CZK 3,000,000 for every insured event. The insurance must be valid for the duration of the real estate brokerage activities.

Due diligence obligations of real estate brokers

The Proposal explicitly sets forth the real estate broker’s duties of professional care and protection of client’s interests. Real estate brokers shall be obliged to inform clients about any circumstances that might have an impact on their decision-making. In addition, real estate brokers must verify the information provided by clients and other information pertinent to the sold real estate (eg seller’s ownership title). These measures are designed to ensure the smooth course of the transaction. In the event of a breach, the real estate broker would face potential liability.

Monetary deposit

The Proposal introduces new parameters for the handling by real estate brokers of clients’ money, in particular with respect to the possible seizure of this money in execution or insolvency proceedings. Real estate brokers will therefore be obliged to keep their clients’ money (eg, purchase price, reservation fee) in a separate bank account. The money in these accounts will be exempt from any execution and/or insolvency proceedings. If the money exceeds a certain amount (the Proposal gives CZK 270,000 as an example), the money must be paid into an escrow account kept by a third party, such as an attorney, notary or bank. This would essentially make it impossible for the real estate broker to embezzle these funds.


The new legislation is expected to come into effect during the second half of 2017. Its enactment will certainly be welcome, as it will not only guarantee better qualified real estate brokers, but will also protect clients’ money in cases where the real estate broker is insolvent or attempts to embezzle funds. Mandatory insurance and due diligence obligations on the part of real estate brokers will also serve to ensure that clients’ interests and potential liability claims are covered.

Profession of real estate brokers soon to be regulated by special law.