Real Estate Professionals Raise Alarms Over New Financial Oversight Mandate
Olena Haidamakha, President of the Association of Real Estate Professionals of Ukraine, has expressed significant concern regarding new requirements for realtors to conduct financial monitoring of property transactions. She warns this could lead to a duplication of functions already performed by banks and notaries, creating practical difficulties and potential market risks. The Ministry of Finance clarified that these obligations for realtors have long been in effect under Law No. 361-IX. This move is part of broader anti-money laundering efforts, but its implementation in the real estate sector is proving controversial.
Practical Challenges and Liability Risks for Agents
Haidamakha emphasized that two entities already act as financial monitoring subjects in any property deal: either the bank or the notary. All property alienation transactions are notarized, meaning the notary verifies documents, identifies individuals, and monitors for suspicious activity and sanctions lists. She noted that any transfer over one thousand dollars requires proof of funds origin. Since a realtor does not handle payments but only mediates via a civil contract, she argued it's impossible to launder money through their service fees, which are far lower than the property's value.
'A person calls about a listing and comes to view an apartment. They are not yet my client; we haven't even signed a contract. And am I supposed to already demand their passport and ask where the money is coming from? That's unrealistic and would even deter people,' stated Olena Haidamakha.
Furthermore, Haidamakha suggested that enforcement appears to involve mass mailings to open registries without distinguishing between active agents and those who closed their sole proprietorships two years ago. She also highlighted the liability risks for realtors: 'But if the information turns out to be incorrect or incomplete, it seems the realtor will be the one held responsible.'
According to the regulations, primary financial monitoring subjects include realtors and other companies providing property purchase-sale or rental services if the monthly rent is 400,000 UAH or more. However, market estimates suggest about 90% of participants operate outside the legal framework. This raises additional questions about the effectiveness of implementing these new requirements and their impact on Ukraine's real estate market, which is already navigating significant economic pressures.
While involving realtors in financial monitoring could substantially alter market practices, existing problems with compliance may create complications for professionals. The lack of a clear legislative foundation and the scale of non-compliant activity in the sector cast doubt on the market's ability to adapt to the new conditions. Observing subsequent legislative changes and their effect on Ukraine's property market will be crucial.
As the real estate sector grapples with these new financial monitoring requirements, it is crucial to understand the implications of upcoming regulatory changes in 2026. These adjustments may further reshape the landscape for real estate agents and their compliance obligations. For a deeper analysis of what these changes entail and how they might affect your practice, explore our article on future expectations for real estate professionals.