AZE.US
Azerbaijan’s realtor market, especially in Baku, has become a routine part of the housing business. But despite how common brokers are in apartment sales and rentals, the sector still lacks clear and transparent rules.
There is no separate law in Azerbaijan that fully regulates realtor activity. The issue is only partly reflected in the Civil Code, and those provisions do not comprehensively define relations between the realtor and the property owner, the realtor and the buyer, or the realtor and the tenant.
Efforts to bring order to the market were made years ago. A draft law and a set of proposals on regulating realtor services were submitted to parliament back in 2012, but they were never adopted.
As a result, the property sales and rental market continues to function in a gray zone, where commissions are often determined not by legal standards, but by private arrangements and the broker’s own demands.
Under the Civil Code, the seller is generally expected to cover the cost of realtor services, and the intermediary is then supposed to pay tax on that income. In practice, however, the situation often looks very different. Brokers frequently charge not only the seller, but also the buyer, and in the rental segment they often collect fees from tenants as well.
That is one of the market’s most persistent problems. People often do not understand on what basis a commission is being calculated or why several parties are being asked to pay at once.
Speaking to Bizim.Media, MP Vugar Bayramov said that in international practice such relations are also often shaped by the market itself. At the same time, he argued that stronger oversight and monitoring are needed in Azerbaijan, particularly in terms of tax discipline.
According to Bayramov, anyone engaged in this kind of activity should be officially registered as a taxpayer and provide services on a legal basis. For that reason, he said, tighter supervision is important above all to reduce tax evasion.
He also said that payments should be determined either by agreement between the parties or through a formal contract. In many liberal economies, Bayramov noted, services of this kind are regulated less by administrative intervention and more by market forces, including competition, supply and demand.
In his view, stronger competition, better tax compliance and more effective oversight could eventually lead to fairer service fees in the realtor market.
In Baku, the standard realtor commission in apartment sales is usually 2% of the deal value.
But because there is no unified and consistently enforced framework, brokers often try to collect that percentage not only from the seller, but from the buyer as well.
That is precisely why Azerbaijan’s realtor market keeps generating disputes: many people still do not know who is actually supposed to pay the commission, or how that fee is being determined in the first place.
In other words, until Azerbaijan adopts a clear legal framework for realtor activity, the sector is likely to remain a loosely regulated space where commissions are disputed, accountability is weak, and transparency remains the exception rather than the rule.