The European Commission has taken action against restrictions on estate agents' activities in Cyprus.
According to a press release by the EC, the Commission has taken action to ensure that the internal market principles of free movement of services and freedom of establishment are respected in Cyprus.
The Commission will send a formal request to Cyprus concerning its national legislation restricting the activities of estate agents. This formal request takes the form of a ‘reasoned opinion’, the second stage of the infringement procedure laid down in Article 226 of the EC Treaty.
If there is no satisfactory reply within two months, the Commission may refer the matter to the European Court of Justice.
In May 2008, the Commission sent a complementary letter of formal notice to Cyprus (IP/08/689) after amendments to Law 273/2004 on estate agents introduced by the Law of 27 July 2007.
According to the press release, the amended Law imposes certain conditions upon the recognition of the qualifications of professionals established in other Member States.
These conditions concern qualifications and professional experience and therefore raise problems of conformity with Directive 2005/36/EC on the recognition of professional qualifications. Moreover, would-be estate agents service providers are obliged to pass an examination proving knowledge of Cypriot legislation in this area.
Furthermore, the freedom to provide services in this profession is subject to the obligation to collaborate with an estate agent established in Cyprus, which is contrary to the provisions of this Directive and the principle of the freedom to provide services enshrined in Article 49 of the EC Treaty.
Lastly, the Law requires legal persons active in this area to exercise this activity as their sole corporate purpose. The person or persons exercising the activity of estate agent in a company are required to exercise this activity exclusively in the company that employs them and may not act independently of their employer either for other persons or companies, or on their own account.
These two provisions raise problems of compatibility with Article 43 of the EC Treaty which guarantees freedom of establishment.
The Republic of Cyprus entered the EU in May 2004. It will assume the EU six – monthly rotating presidency in the second half of 2012.
