Real Estate Broker and Property Developer Ordinance (MaBV): Protection for Real Estate Buyers

Broker and developer regulation – You are not satisfied with the advice of your broker or there are problems with the work of your developer? This situation may be very nerve-wracking and annoying for you. In this article you will learn everything about your rights as a real estate buyer and how the MaBV protects you in case of fraud.

Broker and property developer ordinance at a glance

The Real Estate Agent and Property Developer Ordinance is a legal ordinance that primarily issues specifications to protect the purchaser of real estate during the process. It regulates the form and general provisions for concluding a real estate development contract, but also applies to brokers, lenders, loan agents and construction supervisors.

The most important facts in brief

  • Regulations regarding property development and brokerage contracts
  • Determines the timing and amount of payments
  • A guarantor is needed to accept payments
  • Surety bond can be equated with indemnity bond

You can find out all the details you need to know about the Real Estate Agent and Property Developer Ordinance in this article.

What does the MaBV regulate?

At what point is a broker or developer allowed to take money from you? These and other questions are answered by the Real Estate Broker and Property Developer Ordinance. The ordinance aims to create clarity in confusing processes in the real estate industry and to protect the money of real estate buyers from misuse or unauthorized access.

The most important points at a glance:

  • Performance of the developer is secured with a guarantee
  • Payments (in %) by buyers are based on construction progress
  • Payments may only be used for the contractual projects
  • Separate asset management for different projects

The background to the guarantee is to secure claims for damages by the purchaser. These may arise if the developer or subcontractors commissioned by the developer have deliberately committed tortious acts. However, the guarantee is not a completion guarantee

For whom is the Real Estate Agent and Property Developer Ordinance relevant?

For example, you want to move into an apartment as a tenant in a large city? Especially in urban areas, the real estate market is a highly competitive area, where in many cases you cannot avoid a real estate agent. Through the guidelines of the MaBV you have the possibility to regulate and control the performance of your real estate agent. If agreements made or services rendered are not fulfilled, you can, for example, refuse payment.

Real Estate Buyers

Even those who want to buy a house, whether as their own home or as an investment, can benefit from the regulation: The precise regulations, which govern down to the smallest detail when and how much is to be paid, safeguard the buyer against the developer.

Read on to learn when your broker or developer may require payment from you.

Requirements for payments

If a developer contract is concluded, this does not mean that the developer can immediately demand the corresponding purchase price from you. The reason for this is that you as the buyer should be protected by the MaBV. Therefore, some conditions are attached to the receipt of payments (payment claim), so must/must:

  1. A legally binding purchase agreement is available
  2. The purchase contract must be confirmed by a notary
  3. All permits have been obtained (e.g. building permit)
  4. A priority notice of conveyance for the buyer exist
  5. The object of purchase to be free from land register liens
  6. All other benefits of the contract must be fulfilled

Only then can the broker or developer demand payment from you as the buyer of a property. However, if points of the contract have not been fulfilled by the developer or broker, you as the buyer can:

  • Refuse payments
  • Demand compensation
  • Demand repayments

In summary: Buyer protection and legal consequences

The Real Estate Agent and Property Developer Ordinance is intended to guarantee security for buyers of real estate in particular and to protect them from fraud. This is to ensure that the contractually agreed services on the part of the developer or broker are fulfilled in full. In the event of non-fulfillment of his performance obligation, the buyer can assert rights against his contractual partner. These rights can be, for example, damages or a refusal to pay.