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1 The Swedish Code of Statutes The Estate Agents Act: SFS 2011:666 issued on 19 May Printed June 10, 2011 The Government prescribes 1 the following. Scope of application Section 1. This Act applies to professional brokerage by a natural person of properties, parts of properties, tenant-owned flats, buildings on other person s land, site leases, shared owners with regard to flats, leases or rental tenancies. Those who conduct such operations are termed estate agents. Brokerage refers to an operation based on a agency agreement whose purpose is to designate an opposite party with whom the principal can reach an agreement on an assignment or a grant. Section 2 The stipulations applying to real estate properties in this Act shall also apply to the other property forms specified in Section 1. Sections 18, 22 and 23, paragraphs 1 to 4 do not apply to the brokerage of leases or rental tenancies. With reference to the brokerage of usufruct the stipulations applying to vendors refer to persons who assign or grant usufruct and those applying to purchasers refer to the opposite party. Section 3. The Act shall apply regardless of where the property is located, if an essential part of the estate agent's assignment is performed in Sweden. This does not apply to the extent that the Contractual Obligations (Applicable Law) Act (1998:167) or Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I) 2 provide otherwise. Contractual terms and the binding effect of the Act Section 4. Contractual terms that in comparison with the provisions of this Act are to the detriment of the consumer are without any effect on him or her, unless otherwise provided by law. Consumer refers to a physical person acting primarily for purposes that are outside commercial operations. 1 Prop. 2010/11: 15, bet. 2010/11: CU12, rskr. 2010/11: OJ L 177, , p. 6 (Celex 32008R0593).

2 Registration of estate agents Section 5. Every estate agent should be registered with the Swedish Board of Supervision of Estate Agents. The obligation to be registered does not apply to lawyers, or to any estate agents who engage solely in 1. municipal brokerage of rental tenancies, 2. free brokerage of rental tenancies to students, 3. brokerage of rental tenancies for recreational purposes, 4. brokerage of rental tenancies for premises or 5. brokerage of rental tenancies for rooms where the rental period is a maximum of two weeks. The registration shall refer to either professional brokerage of all the property mentioned in Section 1 (full registration) or professional brokerage of only rental tenancies (registration of rental brokers). The estate agent must pay the registration fee in the form of an application fee and an annual fee. Section 6. Registration as an estate agent requires that the latter 1. is not below age, is not declared bankrupt or is prohibited from engaging in commercial operations, or does not have an administrator in accordance with Chapter 11, Section 7 of the Children and Parents Code, 2. has liability insurance in accordance with Section 25, 3. has adequate training, 4. intends to work professionally as an estate agent, and also 5. possesses integrity and is otherwise suitable to be an estate agent. Section 7. Provisions on certain obligations for those operating as a fully registered estate agent are contained in the Money Laundering and Terrorist Financing (Prevention) Act (2009:62). Sound estate agency practice General duty of care Section 8. The estate agent shall perform his assignment with care and in every respect observe sound estate agency practice. The estate agent safeguards the interests of both the vendor and the purchaser. Within the framework of the requirements made by sound estate agency practice the estate agent shall pay special attention to the economic interests of the principal. The agreement with the principal Section 9. The agency agreement shall be drawn up in writing and signed by the parties. The estate agent may not cite a contractual term that has not been included in the commission agreement or otherwise agreed on in writing. However, this does not apply to agreements on changes to the property price and other terms and conditions for the transfer or grant. If the remit is subject to sole right, the duration of such sole right shall not exceed three months each time. An agreement on the extension of sole right is to be made no earlier than one month before such sole right lapses.

3 If the estate agent has verbally terminated the agency agreement, the estate agent shall also notify the principal of this in writing as soon as possible. If the principal terminates the agreement, the estate agent shall confirm this termination in writing as soon as possible. Downpayment and deposit of funds received Section 10. A deposit that the estate agent has received shall be handed over to the vendor as soon as possible, unless otherwise agreed in the form of an escrow agreement. Monies and other assets that the estate agent receives on behalf of someone else must be kept separate from his or her own assets. An escrow agreement must be drawn up in writing and signed by the parties. Prohibition against certain brokerage of and trading in properties Section 11. An estate agent may not in conjunction with his or her brokerage remit purchase a property that he or she has or has had a remit to broker. Section 12. An estate agent may not broker a property to or on behalf of 1. a spouse or partner, 2. siblings or a relative in a direct ascending or descending line, 3. someone to whom the estate agent is related by marriage in a direct ascending or descending line or in such a way that one is married to a sibling of the other, or 4. any other such closely related person referred to in Chapter 4, Section 3 of the Bankruptcy Act (1987:672). If someone who is closely related to the estate agent acquires a property that the estate agent prior to this acquisition had had a remit to broker, the estate agent shall immediately notify the Swedish Board of Supervision of Estate Agents of this acquisition. Section 13. An estate agent may not trade in properties. Prohibition against confidence-undermining actions Section 14. An estate agent must not engage in any activity that is likely to undermine confidence in him or her as an estate agent. The mere fact that the estate agent receives remuneration for an operation other than brokerage of properties shall not be considered as undermining confidence in him or her, provided that such remuneration is purely negligible. The estate agent must clearly inform prospective vendors and purchasers of this operation and also the remuneration that he or she receives for it. This information must be presented to the principal before the agency contract is concluded and in other respects as soon as possible. Prohibition against acting as a representative Section 15. An estate agent may not act as an agent in representing the vendor with respect to the purchaser or the purchaser with respect to the vendor. However, the estate agent may perform limited duties.

4 Advisory and information obligations Section 16. An estate agent must, to the extent required by generally accepted estate agency practice, provide prospective purchasers and vendors with the advice and information that they may need about the property and other conditions with regard to the transfer. The estate agent must in advance inform prospective purchasers about how the vendor intends to make the sale. The estate agent must take pains to ensure that prior to transfer the vendor provides the details of the property that can be assumed to be of importance to a purchaser. The estate agent must inform a purchaser in writing of the latter s responsibility to examine the property and must endeavour to ensure that prior to purchase he or she undertakes such an examination or has this done. If the estate agent has observed or otherwise known about, or, with regard to the circumstances, has had particular reason to suspect anything relating to the condition of the property that can be assumed to be of importance to a purchaser, the estate agent must specifically enlighten him or her about this. Checking circumstances relating to legal title and registration Section 17. The estate agent must check who has legal title to the property and what mortgages, easements and other rights that encumber it. The estate agent must also check whether the property forms part of one or more joint facilities. If the object of brokerage is a tenant-owned flat, the estate agent must check who has legal title to the property right and whether it is mortgaged. Provision of a written description Section 18. The estate agent shall provide a prospective purchaser who is a consumer with a written description of the property (item description). The item description must include information on the property designation, assessed value, land area and running costs and also the mortgages, easements and other rights that encumber, as well as information on joint facilities. The item description must also include information on the building's age, size and method of construction. If the item being brokered is a tenant-owned flat, the property description must include the name of the housing co-operative, the mortgage on the flat, its share in the co-operative, and land leased. The description must also include information on the flat s number and size, the annual fee and any agreed changes to this and the running costs. The estate agent shall also provide the latest available annual report of the cooperative and its registered statutes. If there is no annual report, the association's financial plan must be provided. The estate agent must offer a written estimate of housing costs. Information on legal title Section 19. Before a property is transferred, the estate agent shall inform the purchaser as to the person who holds the legal title to it.

5 List of offers and other documentation Section 20. The estate agent must keep notes relating to the brokerage remit. The estate agent must also draw up a list of the bids made for the property indicating the bidder's name, contact details, the amount bid and the time at which the bid was made, as well as the terms attached to the bid. This documentation must be submitted to the principal once the remit is completed. If a transfer agreement is concluded, the person who bought or sold the property shall also receive such documentation once the remit is completed. Participation in conjunction with the transfer Section 21. The estate agent must make efforts to ensure that the purchaser and the vendor reach agreement on issues to be resolved in conjunction with the transfer. Unless otherwise agreed, the estate agent shall assist the purchaser and the vendor in drawing up the documents required for the transfer. Notification of potential right to remuneration Section 22. If the agency agreement terminates without the property being sold, the estate agent shall inform the vendor that a subsequent assignment may give the former the right to remuneration. Estate agent remuneration Section 23. Unless otherwise agreed, the estate agent's remuneration is calculated as a certain percentage of the purchase price (commission). The estate agent is entitled to commission only if the transfer agreement has been reached by the estate agent s acting as an intermediary between the principal and a person whom he has presented. If the estate agent has been engaged on a sole-right basis and a transfer agreement is concluded within the sole-right period but without it having been brokered by the estate agent, the estate agent is entitled to commission as if the agreement had been brokered by him or her. Where the estate agent is to be remunerated in the form of commission, the estate agent is entitled to reimbursement of expenses only if a specific agreement has been reached on this matter. Chapter 12, Section 65 a, paragraph 1 of the Swedish Land Law Code provides for remuneration for brokerage of rental flats for residential purposes. Section 24. The estate agent's remuneration may be reduced if the estate agent in performing the remit disregarded his or her obligations towards the purchaser or the vendor. However, this does not apply if such disregard is of a minor nature. Damages Section 25. If the estate agent, intentionally or negligently fails to discharge his or her obligations in accordance with Sections 8-22, he or she shall make good the resulting loss to the purchaser or vendor. Where reasonable, damages may be reduced or waived entirely. If the estate agent has paid damages to the purchaser on account of a loss that the

6 purchaser has suffered in that the property differs from what the purchaser has had reason to expect, the estate agent can claim these damages from the vendor to the extent that the vendor is also responsible for the loss and it is not unreasonable that in the final instance it is the vendor alone who has to bear this responsibility. Notification of claims for damages Section 26. A purchaser or vendor who wants to claim damages in accordance with Section 25 shall notify the estate agent of this within a reasonable time after he or she became aware of, or should have become aware of, the facts constituting the basis for this claim. If the purchaser or vendor fails to notify the estate agent within this period, the right to damages under this Act becomes void. The first paragraph does not apply if the estate agent has acted with gross negligence or in breach of good faith and dishonourably. Period of prescription Section 27. The Limitations Act (1981:130) is applicable with regard to the issue of a period of prescription. Supervision Section 28. The Swedish Board of Supervision of Estate Agents exercises supervision of the estate agents who are registered in accordance with Section 5. The Board shall ensure that estate agents in their operations fulfil their obligations under this Act. Within its field of operations, the Board shall also exercise supervision under the Money Laundering and Terrorist Financing (Prevention) Act (2009:62) and under the regulations that have been issued in connection with this Act. A registered estate agent is obliged to permit the Swedish Board of Supervision of Estate Agents to inspect files, accounting records and other documents pertaining to the business and to provide the information requested for supervisory purposes. Section 29. The Swedish Board of Supervision of Estate Agents shall revoke the registration of an estate agent who 1. no longer meets the requirements of Section 6, 2. has not paid the registration fee or 3. acts in contravention of his or her obligations under this Act. If it can be considered sufficient, the Swedish Board of Supervision of Estate Agents may instead issue a warning or a disciplinary reminder. If the misconduct is minor, the penalty may be waived. The Swedish Board of Supervision of Estate Agents, or, on appeal, a court may decide that a revocation of registration shall take effect immediately. Appeals Section 30. The decision of the Swedish Board of Supervision of Estate Agents under this Act may be appealed to a general administrative court. Leave to appeal is required for an appeal to an administrative court of appeal.

7 Legal penalty Section 31. Any person who knowingly professionally brokers property in violation of the provisions relating to registration in Section 5 will be fined or sentenced to a term of imprisonment not exceeding six months. Authorisation Section 32. The Government may issue regulations on fees under this Act. 1. This Act comes into force on 1 July 2011, when the Estate Agents Act (1995:400) is repealed. 2. The repealed Act still applies in the case of agency agreements concluded before the entry into force. On behalf of the Government FREDRIK REINFELDT BEATRICE ASK (Ministry of Justice)

Estate Agency Act (No. 53 of 16 June 1989)

Estate Agency Act (No. 53 of 16 June 1989) KREDITTILSYNET The Financial Supervisory Authority of Norway Translation as of January 2005 Translated by Government Authorised Translator Peter Thomas This translation is for information purposes only.