Bonus Agents Raking in Billions

ILLEGAL brokers made an estimated RM38 billion in property transactions in 2014, eating up almost 40 per cent of the earnings that could have otherwise gone to licensed real estate agents.

The total transacted value of property in 2014 amounted to RM162 billion, RM97 billion of which was transacted by registered real estate agents and illegal brokers.

Lately, these unlicensed brokers are marketing their services via social media through web portals, web page applications (apps) and Facebook, often getting away with duping unsuspecting property sellers, buyers, landlords and tenants.

And those who become victims of these bogus agents have no recourse but to lodge police reports.

t is believed that for every registered estate agent, there are 20 illegal ones, especially in Sabah and Sarawak.

“Illegal brokers are thriving because the public believe they can get better deals from them.

“But this is a misconception because firstly, they will undervalue your property as their motivation is to sell.

“Victims will be unable to cover their losses unless they lodge a police report.

“On the other hand, if a registered estate agent does this, you can sue for misrepresentation,” said former president of the Malaysian Institute of Estate Agents (MIEA), K. Soma Sundram.

There are 2,400 registered estate agents, 950 real estate firms and 17,500 certified negotiators with tags.

Soma Sundram said although there were some certified negotiators who did not adhere to the law, the public could get redress through the Board of Valuers, Appraisers and Estate Agents (BOVAEA).

“Firstly, they are protected by the negotiators’ firm. If the negotiator does something wrong, the firm will protect the client by taking action against the negotiator. Secondly, the client is protected by a client’s account when it comes to money as it goes into the account.

“The client will also be protected by an indemnity insurance. If anything happens to the money or it goes missing, the insurance will cover the loss, depending on the terms and conditions.”

Soma Sundram said clients of registered estate agents and negotiators were protected by the board and law.

He said the booming property market had enticed many young people to earn a side income as real estate and property agents.

The board recently warned the public to be wary of individuals, investors, business entities and companies that had become illegal brokers intending to cash in on new development projects.

“The Board’s Estate Agency Practice Committee (EAPC) is monitoring and identifying such illegal activities,” said EAPC chairman Eric Lim Chin Heng.

He cited the case of a public-listed company which had started a property portal to promote a developer’s product.

The board investigated the case and found that it had infringed the Valuers, Appraisers and Estate Agents Act 1981.

Those who contravene the act are liable to a fine not exceeding RM300,000 or imprisonment for a term not exceeding three years, or both.

Probationary estate agent Billy Low said from a negotiators perspective, the registration of estate negotiators had elevated the level of professionalism and status of negotiators.

“When we bring our tags during the course of our work, clients can be assured they are dealing with someone who is accountable.

“It (tag) complements the job and we are well equipped to educate the public about dealing with unregistered practitioners.”

Low had come across customers who complained that “estate agents” had overcharged them for professional fees, some by five per cent compared with the standard three per cent approved by the board for registered estate agents.

“The clients couldn’t take action against these illegal brokers because they were not issued proper letters of offer. “A registered real estate negotiator (REN) will follow the rules by having proper documentation so that clients will be better protected.

“By using a registered agent, clients do not have to worry about being overcharged or not getting their money back in case the deal doesn’t go through.

“They know they are dealing with someone who is accountable to the board. “In any event, they can always directly address the board if there are any grievances.

“If they engage an illegal broker, there is no platform for them to seek redress or to lodge a police report.”

Low is also head of MIEA Youth, which aims to raise awareness among young people interested in becoming negotiators but do not know how to go about it.

This article first appeared on New Straits Times Online on 31 January 2016.

BOVAEA

BOVAEA

Board of Valuers, Appraisers and Estate Agents Malaysia was set up in 1981 under the purview of the Ministry of Finance, Malaysia. The setup and operation of this Board is governed by the provision of Valuers, Appraisers and Estate Agents Act 1981. Its primary function is to regulate the Valuers, Appraisers and Estate Agents practising in Malaysia.
BOVAEA