Legal Pitfall: Does a “Licensed Agent” Even Exist?
In real estate listings and agency promotional materials, the phrase “licensed agent” is increasingly used as a guarantee of security and professionalism. While this may sound reassuring at first glance, from a legal perspective the statement is incorrect and can be misleading for clients.
The reason is simple: under applicable law, an agent cannot be licensed. A licence does not belong to an individual, but exclusively to the agency – the licensed broker.
An Agent Is Not the Same as a Broker
The law clearly distinguishes between two roles that are often – intentionally or unintentionally – confused in practice:
- Licensed BROKER (agency) – a legal entity (company or sole trader) that holds an official authorisation issued by the competent ministry and is entered in the Register of Real Estate Brokers maintained by the Croatian Chamber of Economy . Only the broker may be “licensed”, must hold a valid professional liability insurance policy, and bears full legal responsibility for the legality of the transaction.
- Real estate agent – a natural person who has passed the professional examination and is entered in the Register of Real Estate Agents . An agent cannot hold a licence independently nor charge commission on their own.
In other words: the licence belongs to the agency, not to the agent.
Why Is the Term “Licensed Agent” Problematic?
When advertisements highlight a “licensed agent”, they create the impression that an individual independently guarantees the legality of the transaction. In reality, such a guarantee can be provided only by a licensed broker.
An agent acting without the backing of a licensed agency cannot provide the client with legal or financial protection in the event of an error, damage, or dispute – regardless of whether the agent has passed the professional examination.
Paper vs. Practice: Where the Real Difference Lies
This is where the distinction between formal qualification and real expertise becomes clear. Large systems often “produce” agents quickly:
- The exam is theory; the field is practice – passing the professional exam means that an agent understands the law, but it does not mean they can identify hidden legal burdens in Rovinj’s old town or realistically assess market value.
- A stable system makes the difference – in established agencies, agents are not merely “names in a register”. They operate within a brokerage framework built on years of trust, procedures, and in-depth market knowledge.
How Can Clients Protect Themselves?
Before engaging anyone to buy or sell real estate, take these two simple but essential steps:
- Verify the broker – check whether the agency is entered in the official Register of Real Estate Brokers and holds a valid licence.
- Verify the agent – confirm that the person you are dealing with is actually employed by that agency and entered in the Register of Real Estate Agents.
If you are interested in the broader context and recent legal and practical developments, you can read more in the article: An End to Grey Areas in Brokerage .
Conclusion
Do not look for a “licensed agent” in advertisements. Look for a licensed agency with a proven track record and agents who have gained real experience within that system.
In real estate, knowledge is not acquired solely by passing an exam, but through years spent in the field. The licence belongs to the agency – trust belongs to the people behind it.
Frequently Asked Questions (FAQ)
Does a “licensed real estate agent” exist in Croatia?
No. Under current law, a licence is issued exclusively to the broker (agency), not to an individual. An agent may have passed the professional exam and be entered in the Register of Agents, but cannot be “licensed” independently.
Is an agent with a passed exam a sufficient guarantee of safety?
No. Passing the exam means the agent understands the basic legal framework, but it does not provide legal or financial protection to the client. Such protection is ensured exclusively by a licensed agency through its professional liability insurance policy.
May I work with an agent operating independently?
It is unlawful for an agent to operate outside a licensed agency and charge commission independently. Such cooperation exposes the client to serious risk in the event of a dispute or damage.
How can I check whether an agency is legally registered?
You can verify an agency in the official Register of Real Estate Brokers maintained by the Croatian Chamber of Economy.
How can I check the agent I am dealing with?
Verify whether the agent is entered in the Register of Real Estate Agents and whether they are employed by or contractually affiliated with a licensed agency.
Why is the term “licensed agent” so commonly used in advertisements?
Most often due to lack of knowledge or as a marketing phrase that sounds convincing to clients. Although widespread, the term is legally inaccurate and may create a false impression of the actual level of protection.
What matters more than the licence itself?
A licence is the legal minimum. What truly makes a long-term difference is experience, agency stability, in-depth local market knowledge and a transparent way of working.
