Building networks – EXPO REAL 2017

20th International Trade Fair for Property and Investment in Munich. Our specialists will be on location and will be looking forward to meeting you!

Our number-one topic at the Expo Real 2017:
Compliance in the real estate industry!

Buse Heberer Fromm advisess in all areas of real estate law. With more than 20 specialised lawyers and multilingual notaries, we oversee real estate projects from start to finish. Visit us at the Expo Real 2017 at the City of Düsseldorf stand (hall B1, booth no. 210). You’re welcome to talk to us about any questions you may have regarding compliance in the real estate industry and your business. Feel free to book an appointment with one of our specialists – we look forward to welcome you at our stand at the Expo Real 2017!

Compliance in the real estate industry: Our number-one topic at the Expo Real 2017

Compliance standards are a part of everyday business life, not only for large corporations, but also for the “Mittelstand”. Different industries are trying to establish the chances of compliance for themselves including the real estate industry which, notwithstanding an upward trend, is still facing major challenges.

A Compliance-based, professional, transparent and value-oriented corporate management offers significant benefits to real estate companies, both internally and externally.
Compliance can avert risks that can pose a threat to the real estate industry. It can also improve the work environment and the employee culture. Where compliance is practiced in combination with transparency and training, employees develop a new sense of awareness of their own brand andthe company.

This also leads to a significant reduction in risks to companies from the outside. These include:

  • internal and external risks of corruption,
  • breaches of money laundering legislation,
  • the granting of undue advantages to civil servants,
  • corruption, embezzlement, and manipulation of procurement proceedings or tender offerings,
  • false statements during planning proceedings,
  • conflicts of interest and unlawful disclosure of information,
  • price manipulation,
  • kick-back payments in return for favours.

These risks can be either significantly reduced or prevented with a focus-based risk management system within a Compliance Management System (CMS).

Further risks to the real estate industry are posing case law and legislation. Case law increasingly requires proof that a risk or compliance management system is in place. The German legislature has recently established a corruption register to be created at the Federal Cartel Office. Entries in this corruption / anti- competition register can pose an existential threat to any company, especially those tendering for public contracts.

Moreover, the amendment to the German Money Laundering Act particularly affects the real estate industry. According to a study conducted by the University of Halle, real estate is a high-risk segment in terms of money laundering. Real estate transactions are frequently used for money laundering, as the possible options in the sector are many and varied. According to the study, the real estate industry is part of what is known as the non-financial sector, to which a total of 28,000 suspected cases of money laundering are attributed each year. This is equivalent to a volume of 30 billion euros.

A Compliance Management System geared toward the standards of the real estate industry or even an ISO 19600-certified Compliance Management System both protects companies and creates the basis of trust necessary for successful transactions or deals between companies. The international real estate and building industry would be particularly well advised to practice compliance and to lay down clear rules for all those involved as preconditions for any cooperation.

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