Is The Spanish Real Estate Sector Facing a Labour Shakeup?

Over the last two years the nature of the employment relationship between real estate agents and agencies has been under relentless pressure. There has been a growing number of government inspections to crack down on what are called “autonomos falsos” – basically employees categorized as freelance to avoid labour regulations and social security contributions.

The process is painful and not without problems but could bring much needed change to the real estate sector.

These changes are not confined to real estate. It’s part of a wider clampdown by the government on the casualization of employment. A far larger target has in fact been food delivery drivers and riders.

According to the government, in 2023 alone over 32,000 workers who were categorized as freelance were “regularized” and made salaried employees. Over a period of 5 years that number is almost 100,000.

That number dropped to just 7,000 in 2024, which likely represented the success of the campaign amongst drivers, with the number of regularizations dropping in transport by 95%. However, the campaign within the real estate sector continues, with Valencia being the tip of the spear. Beginning in 2022, the government began inspections, fines and regularization within the city, then expanding outwards to the province as a whole.

If real estate agencies are found to be using autonomos falsos they can face significant fines that start at €3,750 per agent and can rise to €12,000 per agent. As well they have the obligation to provide social security payments for up to four years during which an employee worked on a freelance basis.

As with taxi drivers and food delivery riders, the casualization of their work is a relatively recent phenomenon. Previously, real estate agents were employees. In the case of transport jobs, casualization is the result of online apps like Uber.

With real estate agents in Spain, this phenomenon has grown as prestigious real estate agencies from abroad have arrived. They have sought to take advantage of the boom, especially in places like Costa del Sol, bringing with them a freelance-only model from the USA and elsewhere.

However, the way that these agencies have used the law has sometimes undermined quality in the sector and, as it turns out, it is sometimes also illegal.

Under Spanish law, for an agent to be truly a freelancer, they must not have any dependency upon the company, nor can there be restrictions imposed or direction given to their activity. Independent agents set their own hours, do not wear uniforms, abide by a company manual, nor can they rely upon the agency’s IT or other equipment.

This confusion, and sometimes deliberate skirting of the law, was revealed by many of the inspections, according to an article in La Vanguardia:

“In some cases, they are indeed business relationships, but in others, they had all the characteristics of an employment relationship,” Junyent [president of the Federation of Real Estate Agencies] acknowledged. One of the inspection reports indicated, for example, that the agents had their own desk in the office, a working schedule, work distribution among teams, vacation shifts, and a company phone and computer. This report was appealed in court, which upheld the inspection’s decision.

By contrast, genuine self‑employment means the agent organizes their time and methods, may serve several principals, uses their own productive setup, bears business risk, and is not subject to the firm’s direction.

When dependency is present, the relationship is laboral and the state collective agreement for real estate applies. That agreement permits commission‑based pay, but it also guarantees a monthly minimum salary, and sets a minimum commission rate for commercial staff of 5% of net fees. If commissions fall short of the monthly minimum, the company pays the difference.

The application of the law throughout the sector is forcing some agencies to choose one of two paths: formal employment or an “agency contract” that meets the legal criteria of independence.

There are some complaints from agencies that don’t want to pay social security deductions – or can’t – and from agents who are high earners on the basis of commission alone. However, it is only a small percentage of agents who are true “high-rollers”, which the rest are caught in the churn.

Too many agencies follow a model of creating an over-supply of agents – which is especially easy during boom times like the present. If an agent performs highly right away, they keep them around. If they don’t catch on quick enough, they are tossed aside at no cost to the agency.

In addition, the complaints from agencies and high-earning agents misses the larger point that formalizing the sector also means professionalizing it.

Spain has no national standards for real estate agents or agencies. Some regions, such as Catalonia do require agents to take a course and have a certificate but in Andalusia, for instance, this isn’t necessary. All you need is a business license, a company name and a phone.

Add to this lack of professional standards agents who are trained unevenly, depending on the quality of the agency. The lack of minimal pay and the mandatory social security contributions that freelancers must pay in Spain also incentivizes agents to do whatever is necessary to make a sale. It is a recipe for problems and even unscrupulous tactics that damage the sector as a whole and the image of everyone who works in it.

This can include misrepresenting aspects of a sale or property to even engaging in illegal activity in relation to renters seeking housing. The government made it illegal for real estate agencies to charge a finder’s fee to home hunting tenants (although this is still widely practiced, in my experience).

Only landlords can be asked to pay. But it is a sellers’ market and landlords don’t need agents most of the time. A lack of strong national regulation leads to a culture of rule-breaking at all levels.

For our part, at Terra Meridiana, we didn’t wait for a clampdown. We have employed our staff since 2003, complying with the law and industry best practices. We believe in a level playing field where all competition follows the same rules and pays the same taxes and social security contributions.

It has to be said that the employer side has not stood still once the government made clear its intention to crack down. In spring 2024, the Federation of Real Estate Companies (FADEI) met with the National Anti‑Fraud Office of the Labour Inspectorate.

The goal is to cooperate on preventing misclassification, clarify criteria, and increase legal certainty for agencies, professionals, and consumers. It is a clear sign that the sector expects enforcement to continue and wants clearer steps to comply.

It is a wise choice to collaborate with the enforcement offices of the government, as well as to educate agencies in the sector. It can be attractive, of course, to try and avoid the law and save money. But the spreading crackdown in the sector – and some high profile, very substantial fines show that this is penny-wise and pound-foolish.

At the start of August, 2025, for instance, the Valencia branch of luxury real estate agency Engel & Völkers was subject to €6.4 million in fines. They were found to have employed 569 agents falsely as freelancers.

Engel & Völkers is a big company and will survive. But with smaller and independent firms, that kind of fine would be a death sentence. It is wiser to choose to follow the law. If you need to provide direction, control and management of your agents – you should hire them. Agency management should also take courses in labour law to ensure that they don’t unintentionally find themselves outside the law.

Ultimately, it is up to each agency to make the determination of how they want to move forward. But, if you want real autonomy, know that you may have to prove it to an inspector. Eliminate any control indicators: no mandatory company IT systems, no uniform manuals or dress codes, no fixed schedules, no assigned territories, and no team rosters that function like staff shifts.

And don’t expect the inspections to stop. In 2023, the Labour Inspectorate received a 41% funding boost to increase inspections. With the crackdowns of food delivery riders effectively over, the real estate sector will remain in the crosshairs.

Some estimate that 40% of agents are currently treated as freelancers, although in my experience it is much higher. Across Spain, there are an estimated 100,000 agency workers. That is a lot of potential “autonomos falsos” and the inspectorate has made it clear that it intends to follow-up on the 20,000 agencies in Spain. It is a chance to have a better, more professional industry if it is handled with clarity and fairness.

The basic premise for any agency – at minimum – must be that they follow the law. The evolution of the industry over the past 2 decades in Spain has made it clear that accountability and professionalism can only be achieved with the employment of agents. This creates incentives to train and retain staff – and disincentives for agents to bend the rules or be dishonest to “make the sale.”

By Adam Neale | Property News | September 10th, 2025

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