Building trust
Two years ago, a real-estate agent from the US, Donald Pasek, said in an interview for Gazeta Wyborcza that among the 150 real-estate agents he met in Poland at the end of the 1990s, there were only two he would consider cooperating with. In 2002 it was estimated that there were a dozen real-estate agents on the Warsaw market earning about zł.50,000 a month on unfair transactions.
The most popular trick unscrupulous agents used was accepting money from customers for providing them with information on rentable flats which were actually nonexistent or had already been rented. Although now the market is much more reliable, largely due to the actions of the agents themselves, the respected real-estate associations continue to battle the stereotype.
A jungle out there
"If we do not take any radical action in favor of observing standards and ethics, in a few years time we will still find ourselves in a 'jungle', reading, every now and then, ironic articles about the service we provide," writes Danuta Nalazek, member of the board at the Polish Real Estate Federation (PFRN) and a real-estate agent herself, in a letter to her colleagues encouraging them to take decisive action whenever they notice unethical behavior among their peers.
In order to support those who care about the market's improvement, a special team for observing the ethics was formed within PFRN. "The Americans had 100 years to achieve the standards they have now. We need to do it in much shorter time due to the high demand for these services," says Nalazek. "If there is good will among the agents, we have a chance to become a profession of confidence." Nalazek estimates that those who conduct unfair or unethical activities make up some 20 to 30 percent of all real-estate agents in Poland.
Now, observers of the real-estate market as well as the players themselves seem to be much more positive, pointing to the long way the sector has come since its beginnings in the 1990s.
Bridging the abyss
"The quality of the agents' work has changed dramatically. There is an abyss between what was going on at the beginning of the 1990s and what we have now," says Janusz Iracki, the president of Maxon Nieruchomoci, a real-estate agent that has been present on the market for 17 years. He admits that agents' unfair activities peaked in the early 1990s.
"In the 1990s anyone could launch a real-estate agency. As soon as one found out that a next door neighbor wanted to sell their flat, they set up an agency. Such situations were all but rare, thus the reputation of agents was really bad," says Iracki. Sadly enough, he remembers a number of shocking instances of unethical behavior, such as when an agent provided his clients with different versions of a lease agreement for a single property. As a result, the conditions contained in the Polish copy for the Polish owner were completely different from those in the English one received by the foreign tenant.
Market distortion
The turning point for real-estate market was the bill on real-estate management that became law in January 1998. "Before that point, the market was practically unregulated," says Nalazek. That lack of regulation led to huge distortions in the market. Harking back to the beginnings of his company, Iracki argues that in his view the market was heavily regulated indeed - by a monopoly. "Hardly anyone remembers now that until June 1990 there was a monopoly of the PUMA company in services provided to foreigners. Any lease agreements, especially those concerning residential units, could be completed only through PUMA. Only after PUMA's monopoly was lifted in 1990 could one start wider operations in the residential market."
Another attempt to regulate real-estate agents' activities was the introduction in January 2002 of rules requiring agents to gain licenses. "I am convinced that all my colleagues who have the license always act to the benefit of the client. The licensing very much improved the situation. Those agents who obtained the license care about it. Of course the problem of the black market remains. Unfortunately there is no institution that would systematically review the agents' qualifications," says Iracki.
License to sell
Indeed, a license is said to be a guarantee for the customer that the agent will provide high-quality service, as obtaining one takes too much effort and money for an agent to risk losing it. The process is difficult and time-consuming. It takes at least a year to get the document, including a course, training and the exam, which is usually passed by only 30 percent of participants, due to the level of difficulty. The total average cost of receiving a license is some zł.10,000.
Apart from having a license, an agent is also obliged to have third-party liability insurance and belong to one of the official organizations associating agents, such as WSPON (Warsaw Association of Real-Estate Agents) or PFRN. It was the latter that devoted its efforts to working out the Code of Ethics and Professional Standards, which last year was accepted by the Ministry of Infrastructure and put into force in May. The code was a response to all types of mischief that typically occurred. As there were many cases of agents copying announcements available on the internet and pasting them on their websites and pretending it was theirs, there is a regulation saying that an agent is not allowed to advertise or announce an offer unless they have a written agreement with the developer.
Much as Iracki appreciates the standards, he believes some of them need to be modified.
"Maybe it would be enough to add that oral consent for the advertisement is enough. Especially since we live in very hectic world and flats are often rented in a hurry," he says, adding: "There are situations when a developer submits an offer to the agents that he will pay a given commission for the service of putting him in contact with a potential tenant and finalizing a contract. Why should one not be able to operate on this basis?" He complains that current regulations prevent him from providing service to some of his clients who, for example, have gone abroad.
Signs of improvement
Specialists stress that there is a huge improvement in the agents' work and ethics, especially in their relations with the customers. According to the insurers, the claims rate in Poland is not increasing. "From my talks to the insurers it comes out that the claims in Poland are very low. The number of complaints directed to the Professional Responsibility Commission varies frm 20 to 40 a year. Is it a big number considering that there are about 5,500 agents in Poland?" says Iracki.
The market players also point to a great improvement in the agent-employer relations. "The times when an employee stole the database from the real-estate agency, disappeared and established his own agency around the corner are long gone," says Iracki.
When it comes to his rivals, Iracki admits that now the market is much more transparent and less anonymous. "We know each other and we know what to expect from our competitors. Unfair competition takes place very rarely though. I am convinced that Donald Pasek, who is now visiting Poland more often, has changed his opinion about Polish real-estate agents."
