Theactivity of a real estate agent consists of carrying out or assisting, on a regular basis, in transactions involving real estate and business assets belonging to third parties. These transactions mainly involve the purchase, sale, exchange or rental of the property or shares in the company that owns the property.
Access to this profession, governed by the Hoguet Act of 2 January 1970, requires a professional licence issued by the prefecture. This is obtained once certain conditions and formalities have been met. This article is therefore devoted to the conditions governing access to the profession of estate agent.
It should be noted that the profession of property hunter, which consists of searching for a property on behalf of a buyer, under a search mandate, is subject to the same legislation.
- Professional qualifications
- Professional indemnity insurance
- Financial guarantee
- Ability to work as an estate agent
- Issuance of a professional licence
Professional skills
Real estate agents must prove that they have the professional skills required to practise their profession. This means that certain higher qualifications or professional experience are required before a professional licence can be issued. There is also a third option, which is a compromise between the first two.
a. The diplomas required to work as an estate agent are as follows:
- A diploma awarded by the State or on behalf of the State, of a level equal to or higher than three years of higher education after the baccalauréat and certifying legal, economic or commercial studies;
- A diploma or qualification registered in the national register of professional certifications at an equivalent level (level II) and certifying studies of the same nature;
- The real estate professions advanced technician's certificate;
- A diploma from the Institut d'études économiques et juridiques appliquées à la construction et à l'habitation.
b. Professional experience, in the absence of a diploma, consists of at least ten years (or four years as an executive) in a subordinate position related to an activity mentioned in article 1 of the law of 2 January 1970. These periods are calculated on the basis of full-time employment. It is not necessary for the activity in question to have been carried out continuously.
c. If you do not have the necessary qualifications or practical experience, there is a third option for becoming an estate agent. Two conditions must be met cumulatively:
- You must hold either a baccalauréat or a diploma or qualification registered in the national register of professional qualifications at an equivalent level (level IV) and certifying legal, economic or commercial studies;
- have worked for at least three years in a subordinate position relating to an activity mentioned in article 1 of the law of 2 January 1970.
Professional indemnity insurance
Estate agencies and estate agents must take out professional indemnity insurance. As a minimum, this must cover intangible damage caused by errors, omissions or negligence on the part of the insured party, its employees or agents.
The policy has a limited duration. For example, cover must take effect from the date of issue of the professional licence. The contract must also include an annual tacit renewal clause, which can only be cancelled by registered letter sent at least one month before the end of the current contract.
The prefecture is notified by the insurer of the cancellation of the policy, which results in the loss of the professional licence, unless the estate agent can prove that he/she has joined another organisation.
Financial guarantee
As an estate agent, you must take out a financial guarantee to cover the repayment of any funds, bills or securities deposited with you.
The guarantor may be a specially authorised insurance company, a regularly authorised credit institution or one of the institutions mentioned in article L. 518-1 of the French Monetary and Financial Code (the French Treasury, the Banque de France, the French Post Office, the Institut d'émission des départements d'outre-mer, the Institut d'émission d'outre-mer and the Caisse des dépôts et consignations).
The amount of the guarantee required of estate agents must be at least equal to the maximum amount of funds they intend to hold, but may not be less than certain thresholds.
Ability to practise as a real estate agent
Estate agents must be of good character and repute. They must not be disqualified or prohibited from practising. These impediments are those applicable under ordinary law to all professional activities. However, the law of 2 January 1970, known as the "Hoguet law", adds other cases set out in articles 9 to 11.
Issuing a professional licence
Obtaining a professional licence from the prefecture is the final step before you can practise as an estate agent.
You must submit various documents to the prefecture of the département in which your principal place of business or registered office is located, in order to prove that you meet the conditions set out above.
The application for a licence must be accompanied by proof of professional indemnity insurance and a financial guarantee. As far as capacity is concerned, the prefecture will ask for a bulletin no. 2 of the criminal record.
In addition to the compulsory bank account opening certificate, applicants must enclose an extract from the Trade and Companies Register dated less than one month if they are already registered, or a copy of their application if they are to be registered.
The application for a professional licence must indicate the nature of the operations for which it is being requested, i.e. "property management", "property and business transactions" and "list merchant". In the last two cases, applicants may make a declaration on their honour if they do not intend to receive any funds, bills or securities. This exempts the estate agent from opening a special account for this purpose.