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Thursday, November 22, 2007

Modus Operandi of REAs Who "Sells...Sublets..." His Authority to Practise Real Estate Agency

How does a Registered Estate Agent "sells or sublets" his authority to practise real estate agency to unregistered persons?

According to information gathered from my "students" at a college (now university college) where I was giving talks/lectures on the subjects of "estate agency law and practice", the subletting of "licence to practise" is usually carried out these ways:
# 1 person who "rents" the licence will pay the "sleeping REA" a monthly "rent" of a few thousands Ringgit plus 10% to 20% of agency fees collected for the right to exclusive use the licence; or,
# a number of persons, with each paying a few hundreds RM per mth plus 10% to 20% of commission collected in the each month as "rent" in return for the right to recruit their quota of loosely attached illegal Negotiators to practise real estate agency.

In order to ensure that the sleeping principal:
# can disclaim/escape responsibility when there are troubles - such as when there is a suit for misrepresentation by a customer or a prosecution by the authority; or,
# can file a claim for estate agency fee,
all formal documents - such as an agreement for fees - will be executed with calculated ambivalence where the letterhead and registration nos are that of the estate agency/REA but the name used is not that of the REA (usually a nickname), the signature is also not that of the REA and the designation used does not square with the status of the REA so that the "sleeping REA" who "sublets licence" can:
# when he/she needs to disclaim responsibility, allege that the document was not executed by him/her as the signature, the name and the designation were clearly not his/hers - someone without her authority simply misuse her letterhead and registration numbers; or,
# when he/she wants to sue for fees, allege that the document was indeed executed by him/her only that he/she was using another signature, another name and a lower designation - the letterhead and registration numbers which were there would now be used to support his/her case...

Calculated ambivalence is one of the trademark practice of the rogues, the crooks, the money launderer and now the sleeping REAs who sublet their licence too...

Will our Malaysian courts allow calculated ambivalence to have its way when there are specific legal provisions (not to mention common law) requiring the use own signature and name - not other's signature nor other's name nor nickname - to execute formal documents/agreements?

Will our courts allow a professional practice or even a layman not to use his/her own signature or his/her official name in the formal execution of documents/agreements?

Only a test case can provide definitive answers to the questions...

Stay connected to this blog for more on estate agency related issues...

Cheers,

Douglas, GT TANHALIM

Monday, November 19, 2007

An Offence for Any Reg. Estate Agent to...Sublet, Permit...Other Person to Use his Authority to Practise Estate Agency

Other layers of safeguards to public interest that the Malaysian estate agency law provides are through:
1) the imposition of Code of Professional Ethics & Conduct via:
...a) Rules 83 to 110 in Part X of the Valuers, Appraisers & Estate Agents Rules 1986 ("Rules 1986") enacted under sec 32 of the parent Act - the VAE Act 1981;
...b) Standard 5 of the Malaysian Estate Agency Standards 1999 ("MEAS 1999") prescribed under sec 10(g) of the aforesaid parent Act;
...c) Code of Conduct as posted on the official
website
of the Board of Valuers, Appraisers & Estate Agents, Malaysia under the power given in the aforesaid sec 10(g) of the VAE Act 1081;
2) Sec 24 and Sec 30 (of the VAE Act 1981) Offences and Punishments

To prevent conduct of estate agency by any unregistered person on behalf or in the name of "sleeping principal" and/or of any registered real estate agent ("REA") who "sells, transfers, sublets or otherwise permits any other (unregistered) person to use" his/her authority to practise estate agency (an act in contravention of sec 30(i)), the law (Rule 102) insists that the signature, name and registration number of the REA must appear on all documents prepared by him/or her (Rule 110(1)) as well as all documents not of/for administrative purposes (Rule 110(2) & (3)) - the Board has issued Circular (e.g. Cir. 2/97), among others, on what are and what are not administrative documents, for example, all documents on professional fees are not administrative documents - therefore, no one can sign such documents on behalf of the REA.

Rule 110 stipulates that (1)"Every REA shall at all times...observe and perform all his obligations under the VAE Act 1981 and any Rules made thereunder"; and (2)"...comply with every standard, directive, circular guideline and decision of the Board"

Sec 24(d) of the VAE Act 1981 makes it an offence for any REA who contravenes or fails to comply with any provisions of the 1981 Act or any the rules made thereunder including, of course, Rule 110 as stated above...

Now in the real life scenario, how do the REAs "sell, transfer, sublet or otherwise permit any other person to use his authority to practise estate agency" such that the law cannot easily touch them; but when there are fees to be claimed, they can (so they think) easily go to court to claim their fee(s)?


Through the foxy use fronts, veils, fictitious names or nicknames
in what can be described as estate agency practice with calculated ambivalence, these law-breaking REAs think that they can have the best of both worlds: ability to go to court to claim fees and inability of others to convict or sue them - i.e. head they win, tail you lose!

Well, is there really such a perfect loophole for them to exploit?...More on this in my next post...

Cheers,

Douglas, GT TANHALIM

Friday, November 9, 2007

1st Safeguard: Registration of Duly Qualified Persons As Estate Agents

To safeguard public interests against unscrupulous practice of estate agency by unqualified parties and rogues in the 1970s and early 1980s , the Malaysian Parliament enacted a piece of legislation known as the Valuers, Appraisers and Estate Agents Act 1981 (the "VAE Act 1981") which may be considered as the mother of all Malaysian estate agency law.

The enactment introduced a system of registration whereby only duly qualified persons shall thereafter practise as estate agents. The Act took effect from 7 Sept.1984 onwards after the due process in Parliament and a 1-year registration period for those who were practising real estate agency as the principal calling of their vocation then.

After the aforesaid 1-yr registration period, only persons who meet the requirements stipulated in Sec 22A of the VAE Act 1981 shall be entitled for registration as real estate agents and be issued with the authority under Sec 16 to practise real estate agency.

Under Sec 22A, an applicant for such registration must:
1) have attained the age of 21 years
2) be of sound mind
3) be of good character
4) not have been convicted of any offence involving
a) fraud,
b) dishonesty or
c) moral turpitude,
during the 5 years preceding his application
5) not be an undischarged bankrupt
6) satisfies the requirements of qualifications as laid down in Sec 22D
7) have made the required declaration
8) have paid the prescribed fees for registration
9) not be under suspension from estate agency practice nor have his name cancelled from the Register of Estate Agents.

Sec 22D further stipulates that the applicant for registration as estate agent must:
1) be a citizen or permanent resident of Malaysia;
2) have passed the prescribed examinations or their approved equivalents (under Rule 44 as specified in the Sixth Schedule);
3) have been a registered probationary estate agent who has:
a) obtained the required period of Practical Experience under a supervising registered estate agent; and,
b) passed the prescribed Test of Professional Competence or its equivalent

See, how tough it can be to be a registered estate agent in Malaysia. Count yourself lucky if you are served by a registered real estate agent. Why opt to be served by unqualified persons who can "Fly by Night" and never be held accountable when you can be served by a very professional lot.

SAY NO TO UNREGISTERED OR BOGUS AGENTS - YES TO PRACTISING REGISTERED REAL ESTATE AGENTS!

Cheers,

Douglas, GT TANHALIM

P/s: Just as a doctor is not allowed to "loan" his practising "licence" to unqualified persons, the Malaysian estate agency law equally has stipulations against this practice by registered real estate agents in any forms, fronts or veils. What are the stipulations? Wanna know....Well, stay connected for my next post...

My Published Articles On Real Estate Marketing (sponsored by Associated Content):
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http://www.associatedcontent.com/article/440832/successful_marketing_requires_good.html
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http://www.associatedcontent.com/article/422070/the_time_is_now_to_start_an_internet.html
http://www.associatedcontent.com/article/406351/how_to_sell_better_in_real_estate_marketing.html
http://www.associatedcontent.com/article/414265/how_to_do_really_well_as_a_real_estate.html
http://www.associatedcontent.com/article/430785/what_would_you_do_if_you_are_not_able.html

Sunday, November 4, 2007

How Malaysian Estate Agency Law Safeguards Public Interests?

Dear Readers,

In the last post, I mentioned that since the enactment of the VAEA Act 1981 and its subsidiary laws, rules, professional practising standards, practice notes and circulars and the likes, estate agency in Malaysia was no longer a business governed only by normal law of contract or commerce - it has since been additionaly regulated by the aforementioned estate agency law over and above the normal business/contract law.

Its aim was to ensure that the public is served only by duly qualified professional estate agents and by their duly and properly employed assistants known as the Negotiators:
1) Not any Tom, Dick and Harry can practise as a real estate agent (see for examples: Sec 22A, 22C, 23(1)...Rules 102 & 110, the other standards, Circulars and practice notes, );
2) Nor can anyone be simply employed as Negotiators (see for examples: Standard 9 of MEAS 1999, Circulars 11/96 & 1/2000, Circular 2/97, Circulars 11/98 & 12/98, Circular 2/2004...

The Malaysian estate agency law has detailed stipulations to ensure that the public is served only by
1) qualified and practising real estate agents - not the sleeping one(s) who "sublet" or "lease-out" or "loan" their registration/licence to non-registered persons through various means, fronts or veils; AND,
2) Negotiators who are not on loose attachments nor are illegally employed by either the "sleeping principals" or "those who 'loan' licences" from them in blatant contravention of existing estate agency law and stipulations...

What exactly are those stipulations?

Well, we will examine them in detalis in the next few posts...without losing sight of the "big picture" framework.

Stay connected to this blog for more...

Cheers,
Douglas GT Tan