Recovery of Real Estate Agency Fees In Malaysian Courts

Do you know that under Malaysian estate agency law, anyone seeking to enforce a contract to recover in any court any fees, charges or remuneration for any...services rendered as an estate agent would have to meet 2 requirements respectively stipulated in Sec 22C(1)(d) and Sec 23(1) of the Valuers, Appraisers & Estate Agents Act 1981 ("VAEA Act 1981"):

Firstly, Sec 22C(1)(d) requires him to show that "he is a registered estate agent and has been issued with an authority to practise under section 16"

Sec 22C(1)(d) reads :
"No person shall unless he is a registered estate agent and has been issued with an authority to practise under section 16 - be entitled to recover in any court any fees, charges or remuneration for any professional advice or services rendered as an estate agent." and

Secondly, he must also show that "he practises as a sole proprietor..., a partner..., a shareholder or director...or as an employee of such sole proprietorship, partnership or body corporate" - that is, that he is not a freelance registered estate agent practising without a registered estate agency firm.

Sec 23(1) further reads:
"No registered...estate agent shall...have the right to recover in any court any fee, charge or remuneration for any professional advice or services rendered by him pursuant to his practice unless he practises as a sole proprietor of a sole proprietorship, a partner of a partnership, a shareholder or director of a body corporate registered with the Board, or as an employee of such sole proprietorship, partnership or body corporate"

With the enactment of the Valuers, Appraisers & Estate Agency Act 1981 and all its subsidiary rules, professional standards, Circulars of the Board of Valuers, Appraisers & Estate Agent ("BOVAEA"),etc., real estate agency in Malaysia is no longer just a business - regulated only by the normal commercial law of contract.

It is now a profession (also reiterated in Circular 11/96 of the BOVAEA) that is regulated, over and above the normal law of contract or commerce, by specific estate agency law, rules, standards, practice notes and circulars of the Parliament-empowered statutory Board known as the Board of Valuers, Appraisers & Estate Agents (Malaysia)...

Therefore, from the foregoing, it is clear that for any claim of estate agency fee, charge, etc. in any court, apart from having to prove that there was an enforceable agreement, the Claimant would also have to meet the above 2 requirements as laid down by estate agency law!

For your further information, Malaysian estate agency law, in safeguarding public interests, goes as far as to stipulate in details, among others, on:
* "Who may assist the registered estate agent in his practice?" - obviously not just any Tom, Dick and Harry can be as casually employed in a registered estate agency firm as in other non-professional firms; and
* "How should these assistants (known as the Negotiators) be employed by the registered estate agency - in terms of % commission payable, monthly salary, EPF contribution, full-time status, supervision and the likes?"
simply to ensure that the public is served by bona fide registered estate agents or their assistants who can be held accountable and not just anyone on loose attachment or on licence-leasing to a registered estate agency who obviously can easily abscond their responsibilities and, worst still, with the client's money.

Wanna know exactly how Malaysian estate agency law ensures that the public is served only by bona fide registered estate agents and/or their legally-employed assistants known as the Negotiators...and not by operatives on loose attachments or licence-leasing?

Do look out for my next blog post!

Cheers,
Douglas GT Tan