Non-REAs Not Allowed By Law to Participate for Profit in Real Estate Agency Practice of REAs

Hi Folks,

When the Malaysian Real Estate Agency law sets out to protect the public from being served directly by non-REAs by introducing a system of registration of qualified people as REAs (Registered Estate Agents), the law is equally careful enough to ensure - through its legal provisions - that the public is not served even indirectly by non-REAS through some back-door arrangements.

Among the legal provisions to prevent back-door practice of real estate agency in Malaysia by non-REAs are Rule 91 and Standard 5.2.17.

Rule 91(1) prohibits Participation In the Profits of REA’s Practice by any Non-REA; whilst Rule 91(2) allows payment of a share of his commission not exceeding 40% to a member of his staff - whom Standard 9 termed a Negotiator - who is under his control and supervision to assist an REA in his real estate agency practice.

Rule 91(2): Notwithstanding Rule 91(1), a REA may pay a commission to a member of his staff who is under his control or supervision not more than 40% in aggregate of the fee in the transaction.

Again, to prevent "back-door" practice of estate agency by various illegal means (licence-leasing, sub-letting, etc), Std 5.2.17 unequivocally disallows any unauthorised person to carry on estate agency practice in the REA’s name without the REA’s direct and immediate control or proper supervision.

As it is now, the Malaysian Estate Agency law, as far as my understanding goes, disallows any non-REA from participating for profit in the practice of real estate agency in Malaysia in cohort with any Malaysian REA - non-REAs cannot even take up or subscribe for a minority stake in the equity of any registered estate agency (REA) firm of Malaysia.

Only a Negotiator who is duly employed as per, among others, Standard 9 of the Malaysian Estate Agency Standards 1999 or REA firm which enters into a legally binding co-agency agreement may be paid an agreed share (of not more than 40% for a Negotiator) of the commission earned from any deal assisted by the Negotiator or co-broke with the co-agent.

See, how strict it is the Malaysian Estate Agency law in protecting the public from being served by unqualified parties, "fly-by-night" opportunists, rogues and, in short, illegal real estate agents.

Deal only with Registered Estate Agents of Malaysia and their legally employed Negotiators - say NO to Illegal Estate Agents and Property Marketers in any disguise, forms or veils.

Cheers,
Douglas GT Tan