Home
Real Estate Info
Search
Feedback
Knowledge Sharing
Google Adsense Guide
About US
| |
Real Estate Information
STANDARD 1 - INSTRUCTIONS |
|
1.1.0
INTRODUCTION |
|
- Instructions from the
principal decide the scope of authority of the
estate agent and it is thus important that
proper instructions are obtained.
- Upon obtaining proper
instructions the estate agent is obliged to
provide the principal with skilled and
professional estate agency services. He is also
obliged to promote and protect the interest of
the principal.
|
|
|
1.2.0
STATEMENTS OF STANDARD |
|
- In all types of estate
agencies, the estate agent shall obtain prior
written instructions from the principal before
commencement of the estate agency assignment.
- The written instructions
shall include the name of the estate agency
firm, the clear identification of the subject
property and the terms and conditions of the
estate agency engagement and the intended
transaction.
- Subsequent to the agreement
on the terms and conditions of the engagement
and the transaction, the estate agent shall
ensure that any variation of the said terms and
conditions shall also be rendered in writing and
agreed to with the principal.
- All
estate agents are
encouraged to use the Board's Standard Forms on
instructions, MEAS1 to MEAS4 (see Standard 10)
- In line with Rule 97, and
when obtaining instructions from the principal
the estate agent shall not, where another estate
agent has been exclusively appointed or
appointed as a sole agent, as evidenced by a
signboard or any other form of advertisement in
any media referring specifically to the
property:-
- solicit for the same
business;
- accept instructions
without verification from the previous
estate agent that his appointment has been
terminated.
- All
estate agents are
encouraged to obtain exclusive agencies from
vendors or lessons wherever possible and to
point out very clearly to the principal his
rights and responsibilities in respect of the
estate agency agreement.
- An
estate agent must give up
his rights to any fee or commission if a
prospective party first introduced by him goes
on to buy the property through another agent.
This applies only in circumstances where the
second estate agent also has a similar
instruction as the first estate agent from the
principal.
- An
estate agent must not
directly or indirectly harass any people in
order to gain instructions and neither shall he
repeatedly try to gain instructions in a way
likely to cause offence.
- If the principal withdraws
his instructions from an estate agent, the
estate agent must advise the principal of any
circumstances in which he may have to pay more
than one fee and any continuing liability the
principal may have to incur.
- An
estate agent must never
misinterpret the value of a property in order to
gain an instruction.
|
|
|
1.3.0
EXPLANATIONS TO THE STANDARD |
|
- Rule 97 reads:- "A registered
estate agent shall not engage in any practice or
take any action inconsistent with the agency of
another registered estate agent."
- Written instructions can
either be in the form of written instructions
from the principal or written confirmation of
instructions by the estate agent. Written
instructions from the principal refer to a
formal and signed letter or document of
instructions from the principal that is
addressed and communicated to the estate agent.
A written confirmation of instructions on the
other hand refers to a formal and signed letter
or document that is prepared by the estate agent
and sent to the principal and confirmed by the
principal as to the agreed terms and conditions
of instructions.
- Terms and conditions of
engagement refer to the agreed terms and
conditions appointing the estate agent whilst
terms and conditions of the transaction refer to
agreed terms and conditions upon which the
property will be purchased, sold, secured for
rent or lease or let.
- For the purposes of item
1.2.8, the term "harass" means acting in a
threatening or oppressive manner likely to cause
alarm, annoyance and/or distress.
|
|
STANDARD 3 - INSPECTION |
|
3.1.0
INTRODUCTION |
|
- Inspections refer to the
inspections of the property by prospective
parties before buying or renting a property.
- Under the law of agency the
agent must promote the interest of the
principal. The Board additionally requires that
this promotion of the principal's interest to be
applied in fairness to all parties.
|
|
|
3.2.0
STATEMENT OF STANDARD |
|
- Upon commencing an
instruction the estate agent should entertain
queries regarding the property by any
prospective party.
- An
estate agent shall not,
without obtaining prior approval of the
principal, place at a property any sign
advertising the property "For Sale" or "To Let".
- Prior to commencement of
inspection by prospective parties the estate
agent must make all necessary arrangement as to
proper time schedules, obtainment of keys and
obtainment of relevant permission from existing
tenants, before inviting prospective parties.
- All inspections by
prospective parties must be accompanied by a
representative of the firm.
-
Estate agents should take due
care to ensure that only genuine prospective
parties are brought to inspect the property.
-
Estate agents are encouraged
to ensure that every engagement for inspection
is documented and signed by the prospective
party by using a Viewing Form, preferably the
Board's Standard Viewing Form, MEAS5 (see
Standard 10).
- All
estate agents shall be
fair and just to all parties in negotiations and
in drafting or assisting in drafting all
letters, forms and agreements.
- In cases of co-agency, the
inspection of the property must at all times be
with the knowledge and under the overall
supervision of the main listing estate agent.
- An
estate agent is obliged to
communicate any offer received immediately to
the principal and offers must be communicated on
the first-come, first-served basis. The offer
should preferably be communicated in writing.
Alternatively a note should be made in the files
as the relevant details of the communication.
- An
estate agent, unless he is
a registered valuation agent, shall not communicate in
writing to any people whosoever an opinion of
value of a property which opinion may be
construed as a formal valuation within the
meaning of the provisions of the Act and Rules.
- An
estate agent shall not
make any factually unsupportable statement of
the property listed for sale, purchase, letting
or renting.
|
|
|
3.3.0
EXPLANATIONS TO THE STANDARD |
|
- Standard 3.2.2 should rid of
the profession of "poster wars" that is the bane
of the profession at present.
- Standard 3.2.6 encourage s
that in every property inspection a record of
details of viewing by prospective parties is
available.
- An example of a factually
unsupportable statement would be where the
estate agent represents that the adjacent land
is for open space whereas this statement was
made without adequate knowledge or without
checking with the relevant authorities.
|
|
STANDARD 4 - TYPES OF ESTATE AGENCIES/LISTINGS
|
|
4.1.0
INTRODUCTION |
|
- It is important for the
principle, the estate agent and any other
related third party to be aware of the different
types of agencies under which properties are
listed, sold, purchased, let or rented through
estate agents.
- It is equally important that
the type of estate agency is agreed between the
agent and the principal prior to the estate
agency appointment.
|
|
|
4.2.0
STATEMENTS OF STANDARD |
|
- Before accepting an agency
appointment the estate agent shall take
reasonable steps to ensure that the principal is
aware of the consequences of the type of estate
agency to be entered into and shall ensure that
the principal is not put at risk of being liable
for two or more fees or commission.
- Before accepting appointment
as an exclusive or sole agent the estate agent
the estate agent shall advise the principal of
the need to terminate any existing exclusive or
sole agency appointment.
-
Estate agents becoming aware
of an exclusive or sole agency appointment and
not holding a current appointment from the
principal shall direct any inquiry or
negotiation in respect of the property to the
exclusive or sole agent and not the principal.
- When an
estate agent accepts
a sub-listing from a fellow estate agent, the
agency of the agent who offers the property
shall be respected.
- Any sub-listing secured
through fellow estate agents shall not be passed
to another agent without the consent of the main
listing estate agent.
- The acceptance of an
exclusive or sole agency places upon an estate
agent the strongest obligation to render a high
degree of professional estate agency services.
If the estate agent is unable or unwilling to
render such services he should decline the
exclusive or sole agency.
|
|
|
4.2.0
EXPLANATION TO THE STANDARD |
|
- For the purposes of 4.2.1
reasonable steps means that at a minimum the
estate agent must explain to the principal the
differences between the various types of
agencies and its implications.
- The various type of agencies
are as follows:-
- Exclusive Agency This
refers to the instruction from s principal
to a single estate agent to act on his
behalf. The principal may make introductions
but will leave the closing of the
transaction to the estate agent. The
principal must pay the appointed estate
agent the agreed fee even if the estate
agent was not the effective cause of the
transaction.
- Sole Agency Just as in
exclusive agency, a single estate agent is
engaged. The principal may, however, wish to
reserve the right to close deals himself and
is not obligated to pay the agent his fee in
addition to making introductions or an
arrangement may be made for a discount in
fees where the principal plays an active
role.
- Sole Joint Agency This is
a variation of the Sole Agency. The estate
agent works together with the principal as a
team and the fee is divided on a pre-agreed
formula. The principal has the flexibility
to compensate additional estate agents and
at the same time maintain the advantage of
having one estate agent in control.
- Joint Agency This is
where more than one estate agent is
appointed and only the estate agent who
closes the deals gets paid. The number of
agents appointed is limited and each is
aware of the appointment of the others.
- Ad Hoc Basis or commonly
referred to as "Open listing" In this case,
the principal can engage an unlimited number
of estate agents on an ad-hoc basis and fees
are paid only on successful conclusion of
the estate agency transaction.
- Apart from the types of
agencies listed above the Board is aware of the
practice of co-agency or co-broking between
estate agents. This is where the appointed
estate agent enlists the services of another
estate agent's and shares the agency fees
accordingly. In such an instance the principal
is usually not a party to the arrangement. A
more organized form of co-agency is Multiple
Listing.
|
|
|
STANDARD 5 - CODE OF CONDUCT AND ETHICS |
|
5.1.0
INTRODUCTION |
|
- The main purpose of the Code
of Conduct and Ethics is to set out and enforce
a clear and coherent framework of ethical
principles and practices which promotes the duty
of estate agents to discharge their obligations
to the principal, employers, colleagues and
others with due care and with regard to the
wider public interest.
- Towards this end, the Code of
Conduct and Ethics, sets out the standards of
behavior required of estate agents in their
provision of professional services and business
activities.
- Hence, the Code of Conduct
and Ethics provide a positive statement of
professional values and standard of conduct
against which estate agents are accountable to
the Board, to their principal, employers,
employees, colleagues and the public at large.
- The Code of Conduct and
Ethics should be viewed upon as a transparent
system of conduct and values to which estate
agents are expected to adhere to rather than a
set of restrictions. This is in the spirit of
the concept of self-regulation practiced by the
profession.
|
|
|
5.2.0
STATEMENTS OF STANDARD |
|
- An
estate agent shall not
conduct himself in such manner as to prejudice
the professional status or the reputation of the
profession.
- An
estate agent shall be
fully conversant with the Act and Rules, which
must be abided by and adhered to all times. He
shall also have a sound knowledge of all
statutory provisions and procedures relation to
real estate.
- An
estate agent shall render
service to his client and his employer with
absolute fidelity and practice his profession
with devotion to the high ideas of integrity,
honor and courtesy, loyalty to his country and
include a spirit of fairness and goodwill to his
fellow employees and subordinates.
- All
estate agents need to be
familiar with laws as they apply to real estate.
He must take care not to engage in activities
considered to be within the ambit of the
practice of law and shall not give legal advice.
He should recommend that his principal obtain
legal counsel for legal matters.
- An
estate agent shall never
publicly criticize his fellow estate agents or
express an opinion of a fellow estate agent's
transaction.
- An
estate agent shall not
indulge in speculative buying and selling of
properties listed with his firm and actively
forbid his negotiators from doing so.
- An
estate agent shall not
mislead prospective parties by concealing or
withholding material facts related to the
property.
- An
estate agent shall not do
or cause or allow to be done anything with a
primary motive of personal advertisement or
anything calculated to suggest that it is so
motivated.
- An
estate agent shall nor
sanction a publication either in the press or
elsewhere of his photograph as a prominent
estate agent.
- An
estate agent shall not do
or cause or allow to be done anything for the
purpose of soliciting directly or indirectly or
which is calculated to suggest that it is done
for that purpose.
- An
estate agent shall, in his
practice, avoid any conflict of interest.
- All
estate agents shall
conduct themselves, so as to avoid any action
which may leas to a dispute or controversy with
a fellow estate agent and should any dispute or
controversy arise the estate agents concerned
shall make a determined endeavor to settle it
themselves.
- An
estate agent shall never
make frivolous or vexatious complaints about
other estate agents.
- If an
estate agent is
advertising for sale a property that is owned by
the estate agent himself or an employee or an
associate of the firm the estate agent must,
before negotiations begin, immediately disclose
these facts in writing to the prospective
purchaser.
- An
estate agent must make
every attempt to avoid any conflict of interest,
which might not be in the best interest of the
principal.
- An
estate agent shall not
perform legal services, for a fee.
- An
estate agent shall not
allow any unauthorized people to carry on estate
agency practice in his name without his direct
and immediate control or without proper
supervision.
- An
estate agent shall not,
while practicing his profession, carry on or
engage in any other trade or business, which are
in conflict with the fittings, and proper
discharge of his professional duties. He must
not hold, assume or consciously accept a
position in such trade or business in which his
interest is in conflict with his professional
duties.
- An
estate agent shall not
permit himself to be controlled or exploited by
any people or body corporate in any manner
whatsoever.
- An
estate agent shall not practice any deception on third parties.
- An
estate agent shall put
before prospective parties not represented by
him any relevant information/facts, of which he
is aware, whether it is for or against his
principal.
- An
estate agent shall
exercise a reasonable standard of skill and
diligence normally expected of his profession.
- An
estate agent shall prior
to the acceptance of his appointment inform his
principal in writing of the conditions of
engagement and the scale of professional fees
and charges to be applied.
- An
estate agent shall not
attempt to supplant another registered estate
agent who has already been engaged by a
principal nor must he compete with another
estate agent to secure a fee or commission by a
reduction of fees or otherwise.
- It is unethical for an
estate agent to solicit a listing from the owner of a
property where there is a "For Sale" or "For
Let" sign upon the property.
|
|
|
5.3.0
EXPLANATIONS TO THE STANDARD |
|
- Conflict of interest includes
but is not limited to the following situations:-
- The
estate agent must not
keep from his principal or any other party
involved in an estate agency transaction,
information of his peopleal interest, be it
direct or indirect.
- Where the
estate agent
fails to disclose to the principal at the
earliest opportunity the possibility of the
conflict, the circumstances surrounding it
and any other relevant facts. It is
advisable for estate agents to decline
instructions from clients/principal where
there is a conflict of interest.
- Disputes between
estate agents should not be aired in any way
whatsoever, in front of third parties, including
vendors, purchasers of the public. It must
always be remembered that the distasteful action
of any estate agent reflects just as badly on
other estate agents as they do on him.
- All
estate agents shall
ensure that they shall neither compromise nor
impair their integrity, their reputation and
that of their profession, their high standard of
professional conduct expected of them and he
reasonable standard of service expected of them.
An estate agent shall be open, transparent and
accountable to his principal/client, fellow
employees, subordinates and colleagues.
- Exercise a reasonable
standard of skill and diligence under 5.2.22
means adopt peopleal and professional standards
demonstrating the qualities of proficiency,
expertise, knowledge, objectivity, perseverance
and a degree of care expected of a people in a
given situation.
- Examples of misrepresentation
would include, but not limited to the
following:-
- Where an
estate agent
describes a purchaser as a "cash purchaser"
where he knows that the purchaser is
dependent upon financing.
- To state that the
property would fetch a higher price to the
prospective purchaser when in actual fact it
is an untrue statement.
- When the
estate agent
intentionally or by omission causes or
permits a prospective party to believe a
thing to be true, when in fact it is not,
thereby inducing the prospective party to
act upon such believe.
- For the purpose of item
5.2.16 performing legal services would include
drafting Sale & Purchase Agreements, Tenancy
Agreements and any other instruments for a fee
and that is ordinarily done by an Advocate and
Solicitor.
|
|
|
STANDARD 6 - ADVERTISEMENT/MARKETING |
|
6.1.0
INTRODUCTION |
|
- Advertising the property for
sale, purchase, letting or renting is an
important aspect of the work of an agent and
this aspect of the work requires essentially
that the advertising is done tastefully,
professionally, with no misrepresentation and
must not mislead the public as to the facts of
the property.
-
Estate agents should recognize that the profession needs to maintain
its goodwill with the public and it is
imperative not do to harm to the profession by
advertising in an unbecoming manner or without
good taste.
|
|
|
6.2.0
STATEMENTS OF STANDARD |
|
-
Estate agents must ensure
that advertisements and public statements shall
not bring the profession into disrepute and that
they are responsible, accurate and not
sensational in content.
- An advertisement shall comply
with the following conditions:-
- That the said
advertisement is not an intentional attempt
to bring the activities of the estate agent
or his firm to the notice of the public;
- That the said
advertisement shall contain no comparative
or superlative description of his practice;
- That the advertiser makes
no claim to be an expert in any specialized
field;
- That the name of the
advertiser is not printed with undue
prominence; and
- That the published
information must be factual.
- An
estate agent is permitted
to insert any announcements or felicitations in
the local press or mass media provided that his
profession or his professional activity is not
disclosed.
- All
estate agents shall take
all reasonable steps to ensure that any method
of advertising a marketing activity for which he
may be held responsible is neither inaccurate
nor misleading nor likely to cause public
offence and repeated annoyance.
- All
estate agents must not
replace another estate agent's signboard with
his own signboard, or remove another estate
agent's signboard from a property without the
written permission of the principal.
- All advertisements made by
estate agents in promoting the sale, purchase
letting or renting of the property should be
factually accurate and must not misrepresent
facts regarding the property in any manner.
- All advertisement made by
estate agents must display inter-alias the firm's
registration number, the firm's name and
telephone number.
- The advertisement should be
tastefully done.
- The advertisement should not
be written in glowing terms, which overstate the
virtues of the property.
- The advertisement should not
explicitly solicit for business.
- Corporate advertising is
permitted under the following strict conditions
:-
- The advertisement may
state the name of the firm, the address, the
telephone numbers, the facsimile
transmission number, the e-mail address and
the URL address.
- The advertisement may
contain the services offered by the firm and
must not include claims that are laudatory
in nature nor contain mission statements.
- The advertisement must be
in proper places and such places are
magazines, journals, calendars, diaries,
cinemas, electronic media, barites,
airports and balloons. The express
permission of the Board is required in
advertising in any other places other than
mentioned herein.
- The advertisement should
not contain any other statement or claim.
- Flyers are permitted under
the following conditions :-
- The flyer must not
solicit for listings.
- The flyer must specify
the type of property being sold or purchased
or let or wanted for renting.
- The flyer must as a
minimum carry the name, registration number
of the firm, the telephone number of the
firm and address of the firm and shall be
signed by the estate agent.
- Every flyer must carry
the following statement :- "Peoples
responding to his flyer are not required to
pay any estate agency fee whatsoever for
properties referred to in this flyer as this
firm is already retained by a particular
principal".
- A typical flyer that
Board considers proper is as shown in the
attached Form MEAS6 (see Standard 10).
- Foreign
estate agents shall
engage the services of a local estate agent to
jointly market or sell foreign properties in
Malaysia under the following conditions:-
- The local
estate agent
must obtain written permission from the
Board before the sale or marketing of the
foreign property.
- The foreign party must
declare to the Board the profit sharing
arrangement made with the local estate agent. In this respect any deviation from
the Seventh Schedule should be highlighted
to the Board and its approval should be
obtained.
- The local
estate agent
must play a major role and actively
participate in the transaction.
- The local
estate agent
must have adequate knowledge of the property
and that country's framework of real estate
law and practice before accepting the
assignments.
- Due prominence must be
given to the local agent in all
advertisements.
- The approval number given
by the Board shall be prominently displayed
in all advertisements.
- Directional signboards are
permitted provided they comply with local
authority requirements.
- No
estate agent shall
indicate in his signboard, nameplate or
stationary that he is or has been a member of
any association or that he has been associated
with any people or organization or with any
particular cause or matter or that he
specializes in any particular type of work.
-
Estate agents are permitted
to print and distribute business cards under the
following conditions:-
- The business card shall
be in conformity with Rule 118.
- In addition photographs
and mission statements are allowed.
- The firm may produce
brochures provided they are in compliance with
Rule 116.
- Sponsorships are permitted
provided the approval of the Board is obtained.
- Posters and sign boards are
permitted under the following conditions:-
- They must be in
compliance with Rule 122.
- Posters advertising the
sale or letting of the property must not be
put up or erected or pasted on the property
without the written permission of the owner
of the property.
- Posters and signboards
advertising the property must be tastefully
done.
- Each poster and signboard
must have the name, registration number and
telephone numbers of the firm. No estate
agent shall allow his practice to be
controlled in any manner what ever by a
non- registered people with particular
respect to advertising, promotion, marketing
or management.
- All
estate agents shall not
use blind advertisements, that is,
advertisements that do not use the firm's name.
- An
estate agent may print the
name and address of his firm and description as
"Estate Agent" on his greeting card.
- An
estate agent may be
described as the Vendor's marketing agent by
name and address in a developer's brochure
relating to a housing estate, provided undue
prominence is not given to the estate agent.
- A "For Sale" or "To Let" sign
should be removed from a property within (7)
seven days of an unconditional sale or rent
being effected, unless special circumstances
warrant the retention of such a sign.
|
|
|
6.3.0
EXPLANATIONS TO THE STANDARD |
|
- Factual advertisements can
have modern marketing aspects.
- Should not overstate/oversell
the property means basically that the estate
agent should, with the use of as few words as
possible paint a word picture of the advantages
to be gained by owning a particular property.
- Immediately means as soon as
is reasonably practicable in the circumstance.
- A cardinal principle is the
need for care and accuracy on the estate agent's
part, in what he says and what he writes, not
only to be true but not to be misleading by
being incomplete or biased on the particular
subject and if he is in doubt to leave it out.
- The
estate agent should
consider it worthwhile, as a precaution, sending
draft particulars to principals and asking them
to advise them urgently if they have reason to
believe that any statement is inaccurate or
misleading.
|
|
|
STANDARD 7 - ESTATE AGENCY FEES |
|
7.1.0
INTRODUCTION |
|
- Estate agency fees or
commission is based on the Seventh Schedule of
the Rules.
- In addition to the fees or
commission, the estate agent is entitled to
claim, again in accordance with the Seventh
Schedule of the Rules, costs of printing, plans
copies of documents, lithography, traveling
(only where the distance between the agent's
office and the property is 40 kilometers), other
expenses actually incurred, cost of media
advertisements, signboards, brochures and other
promotional materials.
- Estate agency comes under the
Law of Contract and estate agency fees are
generally dependent upon the agency agreement
between the estate agent and the principal. It
is thus important for the estate agent to always
obtain written instructions from the principal
before commencement of the estate agency
assignment.
|
|
|
7.2.0
STATEMENTS OF STANDARD |
|
- The first rule in so far as
estate agency fees are concerned is that it
depends upon the terms and conditions of the
agreement between the estate agent and the
principal.
- When there is no agreement,
written or otherwise, between the estate agent
and the principal then fees are generally due
upon the creation of a binding contract between
the parties to the estate agency transaction.
- If the sale and purchase
agreement or letting agreement is
unconditional, the estate agency fee is due
upon the signing of the sale and purchase
agreement or letting agreement.
- Where the sale and
purchase agreement or letting agreement is
conditional, the estate agency fee is due
when the last of the conditions are met i.e.
when the agreement becomes unconditional.
- Notwithstanding 7.2.2.2,
the estate agent and the principal may agree
to vary from the general rule and agree to
specific terms and conditions on payment of
fees. Such an agreement must be in writing.
- If the principal to the
estate agent aborts the deal either after the
signing of an unconditional Sale and Purchase
Agreement or Letting Agreement or after a
Conditional Agreement becomes unconditional,
then the estate agent is entitled to the full
estate agency fee.
- If the other party to the
deal aborts and the principal to the estate
agent forfeits the deposit or receives
compensation the estate agent is entitled to
claim 50% of the full fee or 50% of the
forfeited deposit/compensation received,
whichever is the lower.
- The computation of fees
payable for any transaction shall be as per the
Seventh Schedule of the Rules.
- In addition to the fees
payable to the estate agent for any services
rendered, the estate agent shall also be
entitled to be reimbursed by the principal for
the disbursements actually incurred, in
accordance with the Seventh Schedule of The
rules.
|
|
|
7.3.0
EXPLANATIONS TO THE STANDARD |
|
- Statement 7.2.1 would be in
line with the common law on agency.
- A binding contract can come
either, when a sale and purchase or letting
agreement is signed, or by way of an option to
buy or written agreement to enter into a
contract.
- The term Agreement referred
to in item 7.2.3 and inferred to in item 7.2.4
includes a valid and enforceable option to buy
or a written agreement to enter into a contract.
- An example of an
unconditional agreement is where no approvals
are required from the Foreign Investment
Committee, the Securities Commission,
Shareholders, or other relevant authorities or
conditions.
-
Estate Agents are not
entitled to deduct estate agency fees due to
them from monies kept with them as stakeholders.
- An
estate agent shall not
charge fees more than those prescribed in the
Seventh Schedule of the Rules.
|
|
Real Estate Information
|
Send mail to
titan4028@gmail.com with
questions or comments about this web site.
Copyright ?2005 E Estate Agent
Last modified: 11/11/05
|
|