One of the fundamental rights granted to European citizens by the Treaty of Rome in 1957, is indeed the freedom of establishment for self-employed persons in all the Member States of the European Community. The Treaty imposes the abolition of all obstacles to the free movement of persons, goods and capital, giving a European real estate agent the right to establish himself in a Member State other than his own. But having to comply with the same conditions and obligations as a national of the host state has, until recently, caused problems in the exercise of this freedom. For this reason the European Council emanated a first Directive in 1989, 89/48 EEC, and a second one in 1992, 92/51 EEC, to impose all Members States to recognise the professional qualifications obtained by citizens in another Member State.

Article 3 of Directive 92/51 EEC, states that where the exercise of a profession is regulated, the competent authority may not refuse to authorise a person of another Member State, on the grounds of inadequate qualifications, to exercise that profession on the same conditions as apply to its own nationals.

National authorities do have the right to reserve the access to a particular profession, to those persons showing a certain knowledge of the trade and certain professional capacities. The medical professional, as we all know, has very strict requirements, but each other profession varies considerably. Taking the real estate profession, there are very different requirements in the different countries, ranging from the very limited requirements of Germany (no training whatsoever, but merely showing financial liquidity and the absence of criminal convictions), to the university level exam plus one year's training required in France.

The above Directives apply to those countries that have in fact "regulated" the profession and they provide for three levels of qualification:

1) diploma of university level, with minimum 3 year's course 89/48/EEC

2) diploma of post-secondary school level, with 1 to 3 year's course 92/51/EEC

3) certificate of a secondary school level. 92/51/EEC

According to the Directives, it is possible for an estate agent to go and set up work in another Member country, if that country has the same level of professional requirements as in his own country and if, of course, he has actually obtained a licence in his own country. He must simply go to the relevant office, Chamber of Commerce or whatever and ask for registration and/or the licence, invoking the relative Directive. If he does not receive an answer within four months, he may appeal to the courts of law. A special "Coordinator" has been appointed in each country to assist anyone with particular problems, and CEI can supply their relevant addresses.

If the host country requires one level higher qualifications than those required in his own country, he may still go and work there, but in this case, that country may request some sort of compensative training. He may be asked to provide proof of experience in the practice of estate agency in his home country and then be asked to choose between the completion of an adaptation period in the host country (of a few weeks training) or do an aptitude test. Language on its own will not be an obstacle, as this can only be required in particular professions, such as interpreters or school teachers.

Generally, proof of additional professional experience will be required if his professional training was only one year shorter than that required in the host country. But if the host country requires a longer training or if there are significant differences in the training requirements, then it will require the adaptation period or the aptitude test.

This freedom of establishment therefore, means that an E.U. citizen can establish himself permanently in any Member State of the European Community in order to pursue an economic activity and this under the same conditions as nationals of the host country. All European citizens have therefore access to self-employed activities without fear of being discriminated on the grounds of their nationality.

Furthermore, this freedom not only applies to one-man-businesses, but also to companies. A real estate agent pursuing his profession under the form of a company, can therefore establish himself in another Member State, on the condition, however, that it involves a European company: that is, where either the company’s official registered office or its principal place of business, is situated within the E.C.

Furthermore, this freedom of establishment means the right to pursue one's profession, not only as a principal activity, but also as a secondary one. Firstly, this means that an estate agent can completely transfer his business to another E.C. country, or open up a completely new one there, or even acquire or take over an existing activity. Secondly, he may open up a second office for his one-man agency or set up a branch or company subsidiary.

For the carrying out of his business, the real estate agent has the same rights and duties as the nationals of the host state: for example, he will have to make his social security contributions, comply with insurance or bonding requirements, with the national tax laws, conditions for join professional organizations, etc.

This general system of recognition of diplomas is, however, only applicable to where the profession is regulated in the host state, ie that there is a law governing the profession, requiring attendance to a course and an admission exam. If a Member State has not regulated the profession of real estate agents, and hasn,'t limited it only to persons showing certain vocational qualifications, then any E.U. citizen, with or without qualifications or experience, is able to establish himself in that country and set up practice there, without having to prove any knowledge or capacity. These foreigners however, will have to comply with all the other normal formalities, as are required of the nationals of the host country. This is the case of Germany and Holland, where the real estate profession is not regulated, so anyone can go and set up business there, simply getting an office licence.

Though the United Kingdom does not have a specific law regulating the profession and in theory, anyone can go there and set up an agency, the general laws on real estate are so severe that, unless one is very well prepared, one could very quickly find oneself in trouble, contravening some law or other (eg. the Property Mis-Descriptions Act), so a candidate would be well advised to first seek proper training through one of the professional associations, NAEA, FRICS, ISVA. This situation has been described as "negative legislation" for the regulation of the profession and in fact the E.C. Directive actually considers for its own purposes, that the profession in the United Kingdom is "regulated".

Of the regulated countries, France is an example of Level 1°, Austria, and Sweden of Level 2° and Ireland, Italy, Denmark and Greece, of Level 3°.

Although the general system for recognition of vocational diplomas seems quite complicated, in practice, it will be much easier to apply, as soon as all Member States have adapted their legislation to the recognition principles of the Directives. Greece and Portugal have still to do so.

Objectively, until there is full harmonisation in all the E.C. countries, strongly advocated by the Confédération Européenne de l'Immobilier, there will continue to remain a certain amount of obstacles to the freedom of establishment for real estate agents in other Member States.

Laurence Camillo

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    Copyright L. Camillo 2000