The activity of real estate brokerage is characterised by the client protection principle. This principle is vital due to the fact that the client is often a consumer who is in a weaker position compared to a real estate agency. For the purposes of client protection, the Real estate brokerage Act both limits the activities of real estate agencies as well as restricts the contractual freedom of parties.
The real estate brokerage contract involves a duty of best efforts in the performance of the real estate agency. The real estate agency must, in conformity with interests of a client, make best efforts to find an appropriate third person who is ready to negotiate and willing to conclude a contract with the client. The real estate agency is not liable if it is not successful in its endeavour but it also does not acquire the right to a payment. Regardless of the success, the real estate agency is responsible for the correct fulfilment of the agreed contract. Under the contract, it is bound to make such efforts, as they are expected to be made by any real estate agency under the same circumstances. The due diligence and care are expected in all dealings, especially in reviewing the real estate and in selection of an appropriate third person.
The right to a payment is linked to the conclusion of a contract between the client and a third person. Therefore, the client must adequately define his or her interests and when presented with a suitable third person, he or she must negotiate with the intent of concluding the contract with said person. Legal protection against fraud is partially provided by the Real estate brokerage Act and partially by the Civil Code which lays down the rules under which a party can be held liable if he or she acts in contrary to the principle of good faith and fair dealing.
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