Articles of Association

THE ARTICLES OF ASSOCIATION OF REAL ESTATE COMPANIES OF ESTONIA

I GENERAL PROVISIONS

The Association of Real Estate Companies of Estonia (hereinafter “the Association”) is a non-profit, voluntary union of legal persons and self-employed persons registered in the Republic of Estonia operating on democratic principles engaged in property brokerage, development, administration, valuation and consultation, as well as and real estate related activities.
The activities of the Association are based on the initiative and conjoint action of its members, on the eligibility of the administering bodies of the Association and on regular reporting of the management to the members of the Association.
The Association collaborates with state and local government institutions, non-profit organisations, also with other institutions, enterprises and organizations, as well as private persons in the Republic of Estonia and aboard, who are interested in the activities of the Association.
The Association is an independent legal person.
The Association has its own system of symbols.
The Association and its management board are located in Tallinn, the Republic of Estonia.
The official name of the Association is Eesti Kinnisvarafirmade Liit. In its international communication the Association uses an English equivalent: the Association of Real Estate Companies of Estonia.

II OBJECTIVES AND STRATEGIES OF THE ASSOCIATION
The aim of the activities of the Association is to participate in the formation and operation of the legally accurately regulated property market in Estonia which is operating on the basis of simple procedures and good customs of property business, is safe and gives the best profit to all participants of the markets.

In order to accomplish the purposes of its activity the Association:
participates in working out laws and drafts of other legal documents and in the improvement of the existing ones;
represents the interests of the members of the Association in state and local government institutions;
organizes legal consultation to the members of the Association;
organizes training and refresher courses for the personnel of the members of the Association;
acquires and systematizes information and know-how which is relevant to legal, property and business spheres in Estonia and aboard;
acquires information about corrupt and unethical legal and private persons operating in the property market and forwards it to the members of the Association;
determines, if appropriate, the level of the necessary skills and knowledge of the employees of the firms which appear as members of the Association and organizes on these bases the necessary certifications or licensing;
carries out surveys of the property market and the clientele, compiles statistics about the Estonian property market;
arranges the publishing of the information pertaining property and its distribution to the members of the Association and to other persons interested in it, enables its members to use the gained information and, if appropriate, forwards it to other participants of the market;
generalizes and, if possible, harmonises the procedures of offering property services;
monitors the fulfilment of the Estonian code of good customs of property business by the members of Association through the formed Court of Honour.

III MEMBERSHIP OF THE ASSOCIATION, CONDITIONS AND PROCEDURE FOR THE ADMISSION, RESIGNATION and exclusion of the members of the association

9. The Association has active members and associated members.
9.1. Legal persons and self-employed persons registered in Estonia, who have specified in their articles of association the activity mentioned in Clause 1 of these articles of association as their principal activity, may belong to the Association as active members.
9.2. Legal persons and self-employed persons registered in Estonia, who are active in the property business related areas, may belong to the Association as associated members. The associated members of the Association shall have the same rights and obligation with the active members, with the exception of the right to vote in the general meetings and to be elected in the management bodies of the Association.
10. The member of the Association may be represented in the Association and in its management or controlling body by the member of the management body (the management board) of the member of the Association, who is registered in the respective registry or by the person authorised in writing by the before mentioned management body.
11. The undertaking wishing to be accepted into the membership of the Association must have been publicly active in the Estonian property market in the fields of activities specified in Clause 1 of these articles of association at least during one year by the date of submitting of the application for membership of the Association. This requirement shall not apply to associated members. The application for membership of the Association shall be submitted in writing with the management board of the Association.
12. The undertaking wishing to be accepted into the active membership of the Association must pass a one-year- probationary period, during which it has equal rights and obligations with the active members, with the exception of the right to vote at the general meetings in questions in respect of which a simple majority of votes is required.
13. The management board of the Association decides on admission, resignation and exclusion of the members of the Association. The general meeting of the Association establishes the respective procedure on the bases of legislation and these articles of association. The management board of the Association keeps records of the members of the Association.
14. A member of the Association shall submit a written application for the resignation of the membership in the Association to the management board of the Association. The member wishing to resign the membership in the Association must give at least a 3 months prior notice before the end of the calendar year and must have paid a membership fee for the period of time of its membership.
15. The management board of the Association may, on its own initiative or on the suggestion of the Court of Honour, exclude the member of the Association from the Association due to non-performance of the provisions of the articles of association of the Association or due to causing of a significant damage to the reputation or financial situation of the Association or due to a material breach of the code of good customs of the Association.

IV THE RIGHTS OF THE MEMBERS OF THE ASSOCIATION

16. The member of the Association have the rights to:
16.1. nominate representatives from among the active members of the Association and be elected into the bodies of the Association. This right does not extend to the associated members.
16.2. participate in the work of the Association and in the events organized by the Association under preferential conditions and use the services provided by the Association;
16.3. put forward questions and suggestions to the general meeting, whereas the questions and suggestions to be discussed at the general meeting, shall be submitted through the management board;
16.4. get information about all aspects of the activities of the Association;
16.5. appeal up to general meeting on the resolutions and activities of the bodies of the Association;
16.6. initiate the summoning of the extraordinary general meeting;
16.7. use the symbols of the Association in accordance with the established rules;
16.8. resign their membership.

V THE OBLIGATIONS OF THE MEMBERS OF THE ASSOCIATION

17. The members of the Association are obligated to:
17.1. fulfil the articles of association of the Association and resolutions of the general meetings;
17.2 pay in time the entrance and membership fees and other fees pursuant to the resolution of the general meeting of the Association;
17.3. pay fines for delay upon late performance of the payment obligations pursuant to the rate and procedure established by the general meeting of the Association;
17.4. avoid provision of unfair competition in respect of other members of the Association;
17.5. comply with the code of good customs of the Association;
17.6 fulfil obligations under the rules of symbols of the Association.

VI MANAGEMENT OF THE ASSOCIATION AND THE GENERAL MEETING

18. The supreme body of the Association is the general meeting of its members which is competent to adopt resolutions in all the spheres of activity of the Association and which is called at least once a year. The members of the association are to be informed of the place of the general meeting and its agenda presented by the management board, in writing at the latest 10 days prior to the meeting.
19. The regular general meeting of the Association is called by the management board. The extraordinary meeting is called with the resolution of the management board on the initiative of the management board itself or by the management board on the written demand of at least one tenth of the members of the Association within one month from the presentment of the application.
20. The resolutions of the general meeting are legitimate if at least half of the members of the Association are present. If fewer members of the Association are present than necessary, the management board will determine a new date for the extraordinary meeting and will inform the members about it. The extraordinary general meeting of the Association has a quorum if at least one fifth of the members of the Association with the right to vote participate, with the exception of meetings where the questions of termination of the Association are decided.
21. The resolutions of the general meeting are declared adopted if at least half of the members with the right to vote, who participate in the meeting, vote for them. Tree fourths of the votes of the members participating in the meeting are necessary when resolutions about the removal of the member of the management board, amendments in the articles of association or termination of the activity are adopted.
22. Only those active members of the Association shall have the right to vote at the general meeting and the management board, who have no payment arrears to the Association.
23. The general meeting:
23.1. approves the articles of association of the Association and makes amendments in it;
23.2. determines the number of members of the management board of the Association and elects the management board;
23.3. elects the chairman of the Association if appropriate, who also acts as the chairman of the management board;
23.4. determines the courses and methods of action of the Association;
23.5. hears out the reports of the management board on the activities of the Association;
23.6. elects the auditing committee and approves its reports;
23.7. approves the annual budget of the Association and its realisation report, establishes the rate and the payment procedure of the entrance and membership fees;
23.8. establishes the rate and the payment procedure (collection procedure) of fine for delay for the late receipt of the membership fees;
23.9. verifies the members’ right to vote on the bases of Clause 22 of this articles of association at the beginning of each general meeting;
23.10. establishes the procedure and conditions for admission, resignation and exclusion of new members;
23.11. establishes the conditions and procedure for becoming a candidate member of the Association and for transformation from the candidate member to the member.
23.12. elects the Court of Honour of the Association and approves its statute;
23.13. adjudicates appeals of its members concerning resolutions of the management board and the Court of Honour;
23.14 terminates the activity of the Association.
24. The resolutions of the general meeting are mandatory for the management board, other management or controlling bodies and the members.
25. The management board of the Association, which is elected for two years and which minimum number of members is 5, manages the Association in the periods between the general meetings and is competent to adopt all resolutions that do not belong to the competence of the general meeting and the Court of Honour. Natural persons with active legal capacity, who are authorised to represent some of the active members in activities of the Association pursuant to Clause 10 of the articles of association, may be the members of the management board of the Association.
26. The member of the management board may resign from the management board by presenting a written application, which shall enter into force on the date of making of register entry concerning the new member of the management board. The general meeting of the Association may elect two alternate members of the management board, who substitute the resigned member of the management board. A member of the management board may be removed by a resolution of the general meeting at any time if the member fails to participate in the activity of the management board in a consistent manner, fails to comply with this articles of association or if the active member, whom he or she represents, has been deprived of the right to vote for longer than three months. The new member of the management board shall be elected at the same general meeting where the removal of the management board is decided.
27. The management board of the Association shall elect a chairman of the management board and a deputy chairman from among themselves, provided that the general meeting has not elected the chairman of the Association.
28. The management board of the Association:
28.1. prepares a draft annual budget for the Association and presents it to the general meeting for the approval;
28.2. elects from among themselves a chairman of the management board of the Association and a deputy chairman, who shall perform the obligations of the chairman during the absence of the chairman, and approves their competence;
28.3. adopts resolutions concerning admission and exclusion of the members of the Association;
28.4. forms an office for the Association, determines its competence and authorisations;
28.5. hears out the reports on the activities of the office of the Association;
28.6. regulates and supervises the use of funds and tangible assets of the Association by the office of the Association;
28.7. decides establishment of structural units, branches, agencies and funds of the Association;
28.8. establishes the procedure for acquisition and transfer of assets;
28.9. approves all rules and instructions regulating the internal activity of the Association;
28.10. approves sanctions for failure to comply with the articles of association of the Association – (warning; exclusion from benefits arising from the membership; deprivation of the right to vote for a period of up to one year; exclusion from the membership).
29. The resolutions of the management board are legitimate if at least half of the members of the management board participate in the meeting. The resolutions of the management board are adopted by a simple majority. If the votes are equally divided, the chairman of the management board or the member of the management board who chairs the meeting shall have the deciding vote.
30. The chairman of the management board shall call the meeting of the management board at least once a quarter.
31. The chairman of the management board of the Association represents the Association in all legal acts alone, while in respect of the other members of the management board the requirement applies that the Association may be represented by two members together.
32. The Court of Honour of the Association shall:
32.1 be guided, in its activity, by the articles of association of the Association, resolutions of the general meetings of the Association, the code of good customs of the members of the Association and legislation of the Republic of Estonia;
32.2. review applications and complaints concerning the contested activities of the members of the Association on the property market, discuss and adjudicate disputes, in respect of which at least one of the participants is the member of the Association and in respect of which no civil procedures are initiated;
32.3. be entitled to make suggestions to the management board of the Association for the exclusion of the members from the Association.

VII THE ASSETS AND THE FINANCIAL- ECONOMIC ACTIVITIES OF THE ASSOCIATION

33. The Association has the right to own assets necessary for accomplishing its statutory aims;
34. The assets of the Association comprise of the tangible assets and funds that are made up of:
34.1. entrance and membership fees;
34.2. voluntary donations of legal and private persons;
34.3. other incoming money;
35. The Association is not liable for obligations and debts of its members;
36. The Association has the right to establish foundations pursuant to the procedure provided in the legislation of the Republic of Estonia and departments pursuant to the procedure established by the general meeting of the Association;
37. The bookkeeping of the Association is organised in accordance with the Accounting Act of the Republic of Estonia.

VIII AUDIT

38. In order to verify the management and the financial and economic activities of the Association a three-member auditing committee is elected at the general meeting.
39. Audition is carried out at least once a year in the Association and the results of the audit are presented to the general meeting for review.

IX AMENDING THE ARTICLES OF ASSOCIATION

40. Amendments in the articles of association are made by the general meeting of the Association.
41. In order to make an amendment in the articles of association, at least three fourths of the members of the Association participating at the meeting should vote for it.

X TERMINATION OF THE ASSOCIATION

42. The Association will be terminated if at least tree fourths of the members of the Association participating at the general meeting vote for such resolution.
43. The Association will be terminated if the number of members of the Association is reduced below ten and in other cases that are specified in the legislation of the Republic of Estonia.
44. The Association will be terminated pursuant to the procedure established by the legislation of the Republic of Estonia.
45. In order to terminate the Association the general meeting forms a liquidation committee who will settle the diving of the assets on the account between the members of the Association or it’s transfer to other persons.

This version of the articles of association is adopted at the general meeting of the Association of Real Estate Companies of Estonia on May 29, 1997 and amended at the general meeting of the Association of Real Estate Companies of Estonia on March 30, 1999 and at the regular general meeting of the Association of Real Estate Companies of Estonia on June 19, 2008.