Time to change: The Ministry of Justice continues to put order in the chaos of the rental market, and in the real estate broker industry in particular. Against the background of rising housing prices and the ever-increasing housing crisis, the rental market, especially in the center of the country, sometimes resembles a "jungle" that currently operates without any state supervision. As previously published in "Israel Hayom", the ministry contacted the research company MNS a few months ago to examine various alternatives for applying regulation to the rental market.
This is a market that has significant information gaps, which are fertile ground for deception, exploitation and actual damage to the bargaining power of the citizens, and according to the survey by the Ministry of Justice - 63% of the apartment renters who used brokers are not satisfied with the service they received.
Director General of the Ministry of Justice, Attorney Eran Davidi, Photo: Ministry of Justice
From the presentation presented to the Director General of the Ministry of Justice, Attorney Eran Davidi, and which reached Israel Hayom, it appears that the research company proposed five regulatory alternatives regarding the level of the brokerage fee in the rental market, in accordance with the solutions implemented in the world and "in light of the problems identified in Israel."
Among the range of alternatives proposed, from the prohibition of brokerage in the rental market to a free market without supervision at the edges, it can be assumed that the ministry will adopt one of the three middle alternatives: equality in the brokerage fee, so that it is divided equally between the landlord and the tenant;
Applying the "requester principle", so the party who ordered the mediation service will pay the commission;
Or supervision of the brokerage fee in the rental market, so that the amount of the brokerage fee will be limited by law.
is in the last line
Currently, the Ministry of Justice is not talking about the preferred alternative, and is waiting for the next Minister of Justice to present him with the Ministry's solutions for the rental market.
The research company states in its work that due to the uniqueness of the Israeli market, it is necessary to consider installing a temporary order, and not enacting a permanent law.
At the same time, the rules of ethics that will regulate the real estate broker market are almost ready in terms of drafting, and will soon be presented for public comments.
The rules, which are currently being worked on by lawyers and professionals, will be approved by the director general of the office, and will go into effect alongside a public campaign that is expected to be launched on the issue to bring the new rules and the rights available to the public.
Attorney Eran Davidi, Director General of the Ministry of Justice: "The current challenges in the real estate market require us to make adjustments.
I believe that making them a binding professional standard will immediately lead to the improvement of the service provided to the public.
The role of the rules of ethics will be to make sure that the little citizen is faced with a professional who provides knowledge and professional and fair guidance in exchange for the payment given to him.
We want to make sure that when the citizen is required to pay brokerage fees, he will receive a proper service for his money.'
So what are the proposed rules of ethics?
These are some of the rules of ethics that will likely apply to the broker market: the obligation to identify the broker and show his license;
Prohibition on a mediator to prevent or make difficult a meeting or direct contact between the parties to the transaction (after guaranteeing the parties' obligations towards the mediator and his entitlement to mediation fees);
Prohibition of using personal information or information about the property for another purpose without the customer's consent;
Prohibition of unfair influence when agreeing to receive brokerage services and providing the service;
prohibition of stipulation of service;
Obligation of disclosure in relation to the additional services provided beyond the mediation services and their separate cost (such as legal services or mortgage advice);
and the obligation to document and keep documents.
Reliable base information
Also, a broker will be obliged to provide reliable basic information as part of the provision of the service - such as the area of the apartment (gross, net and the source of the information), city building plan (in relation to the property and in relation to its surroundings within a defined limit), defects according to the statement of the property owner and more.
New apartments in Rosh Ha'Ein (archive), photo: Yehoshua Yosef
The broker will be obliged to disclose material information, including exclusive brokerage or with a receiver, he will be obliged to recommend professional services required in clear cases, and the provision of false or misleading information regarding the property will be prohibited.
With regard to property advertising, the proposed ethics rules include: prohibition of false, misleading or out-of-date publications;
Prohibition regarding publications without valid permission and consent of the owner of the property;
Prohibition regarding publications without indicating the involvement of the intermediary and his license details in the ad;
and the obligation to use the title "real estate broker" as part of the provision of the professional service.
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