Establishing Operating Regulations for Real Estate Brokerage Enterprises

Establishing operating regulations for real estate brokerage enterprises is a mandatory obligation under the 2023 Law on Real Estate Business. Establishing these regulations helps enterprises standardize operational processes and control legal risks. The content must update new regulations on land and housing. Below is crucial information to consider when building operating regulations from the expert team at Long Phan Consulting  Company.

Principles for establishing internal regulations in brokerage firms

Building operating regulations must comply with principles of legality and social ethics. The document must concretize the regulations in Article 61 of the 2023 Law on Real Estate Business. Feasibility and synchronization with actual operations are vital factors determining the regulation’s value. You should focus on information transparency in every brokerage stage.

When building regulations, the powers and responsibilities of each specialized department must be clearly defined. The document’s structure must be tight, using precise and easily understandable legal language. Enterprises must conduct periodic reviews to ensure the timeliness of internal regulations.

>>>See more: Role of Real Estate Brokers in Land Transactions

Conditions for organizations and individuals to conduct real estate brokerage services

Organizations and individuals conducting real estate brokerage services must establish a real estate service enterprise under Clause 5, Article 9, and Article 61 of the 2023 Law on Real Estate Business, and must meet these conditions:

• Must possess operating regulations for real estate brokerage services.
• Must have physical and technical facilities meeting operational requirements as prescribed by the Government.
• Must have at least 01 individuals possessing a real estate brokerage certificate.
• Before operating, the enterprise must submit its information to the provincial state management agency for real estate business where it is established to be posted on the housing and real estate market information system.

Individuals practicing real estate brokerage must meet these conditions:

• Possess a real estate brokerage practicing certificate.
• Practice within a real estate trading floor service enterprise or a real estate brokerage service enterprise.

Rights of real estate brokerage businesses and individuals practicing real estate brokerage

According to Article 64 of the 2023 Law on Real Estate Business, the rights of businesses providing real estate brokerage services and individuals practicing real estate brokerage include:

Businesses providing real estate brokerage services have the following rights:

• Conduct real estate brokerage activities in accordance with the provisions of the 2023 Law on Real Estate Business;
• Request relevant organizations and individuals to provide records and information regarding the real estate transactions.
• Service fees are charged to customers as agreed upon by the parties;
• Refuse to broker real estate that does not meet the eligibility requirements for operation;
• Require the organizations and individuals involved to compensate for damages caused by their negligence;
• Other contractual rights.

Individuals practicing as real estate brokers have the following rights:

• Conduct real estate brokerage activities in accordance with the provisions of the 2023 Law on Real Estate Business;
• Request relevant organizations and individuals to provide records and information regarding the real estate transactions.
• Refuse to broker real estate that does not meet the eligibility requirements for operation;
• Require the organizations and individuals involved to compensate for damages caused by their negligence;
• Receive fees and commissions for real estate brokerage as stipulated in Article 63 of the 2023 Law on Real Estate Business.

>>>See more: Payment Methods for Real Estate Brokerage Remuneration for Practicing Individuals

Obligations of real estate brokerage businesses and individuals practicing real estate brokerage

Under Article 65 of the 2023 Law on Real Estate Business:

• Provide complete and truthful documentation and information about the properties you are brokering, and be responsible for the accuracy of the documentation and information you provide;
• Organize annual training and professional development programs to enhance the knowledge and skills of real estate brokers working within the company.
• Fulfill tax obligations to the State;
• Compensate for damages caused by one’s own fault;
• Comply with reporting requirements as stipulated by law and be subject to inspection and auditing by competent state agencies;
• Other contractual obligations.

Individuals practicing as real estate brokers have the following obligations:

• Provide complete and truthful documentation and information about the properties you are brokering, and be responsible for the accuracy of the documentation and information you provide;
• Fulfill tax obligations to the State;
• Compensate for damages caused by one’s own fault;
• Comply with the operating regulations of the real estate exchange or real estate brokerage business where the individual works;
• Participate in annual training and professional development programs to enhance your knowledge and skills in real estate brokerage.

The core content of the regulations governing the operation of real estate brokerage businesses

Operating regulations must cover the entire operational process and arising risk control. This focuses on personnel standards, consulting processes, and professional ethics.

Regulations on organizational structure and personnel management

The enterprise establishes an organizational chart with specific functions for each department, ensuring operational consistency via the operating regulations. Decentralizing management helps control information flow and make accurate investment decisions. You should clearly stipulate recruitment standards for ethical and skilled brokers.

Internal training regimes on the 2024 Land Law and 2023 Housing Law must be maintained regularly, tied to the operating regulations to standardize deployment. The enterprise builds KPIs based on closing rates and client satisfaction. Disciplining violating personnel is the basis for maintaining brand prestige.

Brokerage procedures

The process begins with receiving and legally appraising input real estate products, executed according to the regulations to ensure consistency and risk control across the system. Staff check planning, dispute status, and land use right certificates. You must standardize consulting document kits to ensure consistent information.

Signing brokerage contracts must comply with the template prescribed in the Decree guiding the Law on Real Estate Business. The product handover process and title transfer support must be strictly supervised. Establish a service completion confirmation mechanism as a basis for fee collection.

Code of Professional Ethics

Transparency is a core principle in the relationship between brokers, sellers, and buyers, and this principle needs to be concretized through the establishment of operating regulations within the business. The business strictly prohibits price gouging or providing false information about the project. Customers must commit to maintaining the confidentiality of their partners’ personal information in accordance with the law.

Brokers are prohibited from receiving fees outside of the contract that harm the interests of clients; this regulation needs to be clearly specified in the company’s operating regulations. The regulations should include provisions for handling conflicts of interest when brokers are involved with the assets being traded. The integrity of the team is the company’s greatest intangible asset.

Regulations regarding financial management and commissions

Service fee policies must be publicly listed at the trading floor office and clearly stipulated in the regulations to ensure transparent and consistent application. Define a commission-sharing mechanism for brokers based on actual revenue. Control transaction cash flows to ensure liquidity and tax obligations.

The payment process must be executed via bank transfers for financial transparency. Establish a risk contingency fund to handle financial complaints. The accounting system must fully record successfully executed brokerage contracts.

Regulations regarding record and data storage

Real estate transaction dossiers (contracts, drawings, legal documents) must be standardized in the operating regulations to ensure unified archival and management. Utilize technology to manage client data scientifically and securely. Note the statutory archival periods for hard and digitized copies.

The regulations define data access rights to prevent potential client list leaks. Expired dossier destruction must follow the board of directors’ approval process. A good archival system facilitates easy retrieval during inspections or disputes.

Internal control and violation handling mechanisms

The Supervisory Board monitors the compliance of all employees with regulations, closely linked to the development of operational regulations to ensure the effective operation of the inspection and supervision mechanism. The company establishes a channel for receiving reports of violations from customers and partners. Customers may apply disciplinary measures ranging from reprimand to dismissal depending on the severity of the violation.

The process for handling violations must ensure objectivity, fairness, and clear evidence, and should be clearly defined in the operational regulations to ensure consistency and transparency in application. Businesses have the right to claim compensation if the violation causes property damage. The results of the violation handling are communicated internally to serve as a deterrent and for learning from experience.

The process of developing and issuing operating regulations

Building internal normative documents requires logic and high practical applicability. This process spans from surveying the current status to official promulgation.

Survey of the current state of business operations

Experts conduct an assessment of the business model and the main types of real estate brokered. Identifying weaknesses in management helps to shape the content of regulations to be more realistic. Clients provide samples of past contracts so that experts can analyze the risks encountered.

Drafting the regulations

Based on the survey results, the legal team developed detailed chapters and clauses for the regulations. The document must incorporate the latest provisions of the 2023 Real Estate Business Law. The company ensures that the regulations do not conflict with the company’s published charter.

Gather internal feedback and refine

Based on the survey, the legal team builds detailed chapters and clauses. The text must integrate the newest provisions of the 2023 Law on Real Estate Business. Ensure the regulations do not conflict with the issued company charter. 

Issuing and disseminating regulations

The company director signs the decision to issue and determine the effective date of the regulations. The company organizes a briefing session to ensure employees understand their new rights and obligations. Customers are required to post the regulations at their headquarters and publish them on the company website.

Update and amend regulations in accordance with legal provisions

Land and real estate laws are constantly changing and being supplemented. Businesses need to periodically review their regulations to update them with new circulars and guiding decrees. Clients should amend their regulations according to the established procedures.

Long Phan Consulting  Company provides services for establishing operating regulations for real estate brokerage firms

Our services help clients establish a professional, legally compliant governance system. Perfecting the operating regulations creates a transparent operational basis for the trading floor. Our lawyers will deploy the following tasks:

• Review the entire current legal documentation system of the brokerage firm.
• Draft detailed clauses when establishing operating regulations for a real estate brokerage firm.
• The document incorporates the latest regulations from the 2024 Land Law and the 2023 Housing Law.
• Establish internal control procedures and a commission sharing mechanism for brokers.
• Guidelines on the procedures for issuing and disseminating internal company operating regulations.
• Providing advice on resolving issues that arise during actual operation.
• Representatives work with government agencies regarding the conditions for providing services.

Frequently Asked Questions about Establishing Operating Regulations for Real Estate Brokerage Businesses

Below, Long Phan Consulting  Company provides some frequently asked questions related to the procedures for establishing operating regulations for real estate brokerage businesses. We invite interested clients to refer to this information:

Will a business that fails to establish operating regulations for its real estate brokerage operations be penalized?

Yes, this behavior constitutes a violation of business conditions. According to Article 61 of the 2023 Law on Real Estate Business, possessing an operating regulation is a mandatory condition for an organization to be permitted to conduct brokerage services. In the absence of this document, the business will be subject to administrative penalties and may have its trading floor operations suspended in accordance with the law on handling violations in the construction sector.

What are the requirements regarding physical facilities when establishing operating regulations for real estate brokerage firms?

Businesses must have a fixed business location and headquarters. Clause 2, Article 61 of the 2023 Law on Real Estate Business requires legal entities providing services to have physical and technical facilities that meet the operational requirements as stipulated by the Government. This includes information technology infrastructure for displaying information and suitable workspace for conducting direct consultations with clients.

What is the difference between brokerage fees and commissions in the operating regulations?

Brokerage fees are paid based on the performance of specific tasks, while commissions depend on the successful outcome of a transaction. Article 63 of the 2023 Law on Real Estate Business stipulates that fees are agreed upon by the parties and are not dependent on the transaction outcome, while brokerage commissions are only paid when the brokered party signs a contract for the purchase, transfer, or lease of real estate.

Does the regulation governing the operation of real estate brokerage firms mandate that payments be made through banks?

Non-cash payment regulations are mandatory. According to Clause 2, Article 48 of the 2023 Law on Real Estate Business, all revenue from service fees, commissions, or brokerage fees of real estate service businesses must be conducted through accounts opened at legally operating credit institutions in Vietnam. Internal regulations need to specify the procedures for controlling these transactions to ensure financial transparency.

To which agency must a business submit its operational information after establishing its regulations?

Information must be submitted to the provincial-level state management agency for real estate business where the company is established. Article 67 of the 2023 Law on Real Estate Business stipulates that businesses must provide information to be published on the housing and real estate market information system before officially operating services. This helps customers and authorities monitor the legality of the trading platform.

Are real estate brokers required to attend annual legal training?

Yes, this is a regular obligation for both businesses and individual brokers. Clause 2, Article 65 of the 2023 Law on Real Estate Business requires businesses to organize annual training and professional development courses for their employees. Simultaneously, individual brokers are obligated to participate in these training courses to update their knowledge of new regulations from the 2024 Land Law and the 2023 Housing Law.

Conclusion

Building operating regulations for real estate brokerage enterprises is a strategic step to affirm professionalism and prestige. Tight regulations help protect business owners from legal risks and remuneration disputes. Enterprises must proactively apply new management standards to adapt to the 2023 Law on Real Estate Business changes. If you require in-depth support, please contact Hotline 1900636389 to receive professional consulting from Long Phan Consulting Company.