Anyone who wants to buy or sell a property on Ibiza will sooner or later have to deal with two professions: estate agents and lawyers - usually in that order. While the legal profession is regulated by the Bar Association of the Balearic Islands  (www.icaib.org), regulation of the profession of estate agent in the Balearics is only now being regulated as part of the recent emergency laws to combat the housing shortage (additional provisions 13a and 14a of Law 3/2024 of 9 May 2024). Estate agents were granted a transitional period of 6 months before the law would take effect, so the regulatory provisions actually came into force on 9 November 2024.

This new regulation aims to push  rogue estate agents out of the market, and thus improve the quality of service provided to buyers and sellers. Among other things, all estate agents on the Balearic Islands must now maintain a publicly accessible office. This means they must provide their clients with a postal address where they can submit any complaints. This of course will affect estate  agents who previously worked only online and/or by telephone. 

Another very important point of the new regulation is the introduction of a register for real estate agents in the Balearic Islands (Registro oficial de agentes inmobiliarias de las Illes Baleares, https://caib.es/sites/agentsimmobiliaris/es/inicio/ for more information). Those agents with a university degree in either law, engineering or architecture are automatically eligible to register. Agents without a university degree must prove their qualifications through training courses or have at least 4 years of professional experience. The training courses must be officially recognised in Spain and have a duration of at least 200 hours. This is likely to be a difficult hurdle for foreign estate agents without any knowledge of the Spanish language. The registration number awarded by the new regulation must appear on all of the broker’s advertising material. Furthermore, liability insurance and a security deposit of 60,000 euros are required.

In Spain the estate agent is paid by the seller, so the interests of the various parties are quite clear. The estate agent’s client and invoice recipient is the seller. Under the new law estate agents must sign an agency agreement with the seller, and all relevant documents relating to the property need to be disclosed. What many people don’t realise is that most sellers today do not place exclusive orders with just one estate agency’s office. Properties are most often offered to a large number of estate agents. When a deal is finalised this can cause problems, as several agents might claim a commission. In some cases the agents have agreed among themselves as to who gets how much of the commission. This can lead to several estate agents sitting at the table during the notarisation, because the estate agents want to receive their commission from the purchase price immediately.

In a first step the legal and tax assessment of a property – in particular the determination of unencumbered status – should only be carried out by an independent lawyer. Doing it through a lawyer is in the best interests of all parties involved, as both estate agents and lawyers have a major interest in a property market that is functional and fair. The estate agent has a vested interest in the sale going through, as they will only receive their commission if they have found the buyer and convinced them to buy the property. On the other hand, the lawyers are paid for their advice, so they are paid even if they advise their client not to complete the purchase. However, in practice a sensible lawyer will endeavour to ensure that the client is able to purchase the property, and will do everything possible to remove any obstacles that may exist. So it is important that buyers are advised to seek independent legal advice from a lawyer.

A large number of established estate agents and real estate agencies on the Balearic Islands have long been calling for the regulatory measures that have now been implemented. Nonetheless, the industry faces several challenges, and it remains to be seen how estate agents will adapt to these new regulations. However, most of them are quite happy that at the very least, this should put an end to the days of the “estate agent pirates”.