PROPERTY - REAL ESTATE AGENTS & VALUERS

Property Agents in Malaysia are governed by the Valuers, Appraisers and Estate Agents (Amendment) Act 1997.

General Code of Conduct and Ethics for Registered Valuers, Appraisers and Estate Agents

Every registered valuer or appraiser or estate agent are duty bound to render service to his client with absolute fidelity, and to practise his profession with devotion to the high ideals of integrity, honour and courtesy, loyalty to his country, and also to conduct business in the spirit of fairness and goodwill to his fellow professionals in the real estate industry.
 

A registered valuer or appraiser who acts as an estate agent to a transaction should not subsequently value the same property for the same purchaser.
 

All valuation reports must follow the format and guidelines issued by the Board from time to time.
 

No registered valuer, appraiser or estate agent shall, directly or indirectly, allow or agree to allow participation by any person or company, other than a registered valuer, appraiser or estate agent in the profits of his professional work.
 

It is a duty of a registered estate agent to protect the public against fraud, misrepresentation and unethical practises in respect to all real estate transactions.
 

A registered valuer, appraiser and estate agent must inform his client of the nature of any business connection , interest or other affiliations he may have in connection with the service to the client.
 

A registered estate agent shall not accept fees from more that one client in any one transaction.
 

A registered estate agent shall not act for one party to a transaction while another registered estate agent from the same firm or related or affiliated firm, is acting for the other party to the same transaction except with the knowledge and consent of the parties concerned.
 

A registered estate agent’s name and signature must appear on all proposals, reports and other documentation prepared by him indicating his status as a registered estate agent.
 

A registered valuer’s, appraiser’s and estate agent’s branch offices shall be headed by a resident registered valuer or appraiser or estate agent.

MALAYSIA ESTATE AGENCY STANDARD

The aim of the Estate Agency Standard is to set the required high standards for the practice of estate agency in Malaysia.

Standard 1 - Instructions
 

1.1.0 INTRODUCTION
1.1.1 Instructions from the principal decide the scope of authority of the estate agent and it is thus important that proper instructions are obtained.

1.1.2 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
1.2.1 In all types of estate agencies, the estate agent shall obtain prior written instructions from the principal before commencement of the estate agency assignment.

1.2.2 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.

1.2.3 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.

1.2.4 All estate agents are encouraged to use the Board's Standard Forms on instructions, MEAS1 to MEAS4 (see Standard 10)

1.2.5 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:-

1.2.5.1.1 solicit for the same business;

1.2.5.1.2 accept instructions without verification from the previous estate agent that his appointment has been terminated.

1.2.6 All estate agents are encouraged to obtain exclusive agencies from vendors or lessors wherever possible and to point out very clearly to the principal his rights and responsibilities in respect of the estate agency agreement.

1.2.7 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.

1.2.8 An estate agent must not directly or indirectly harass any person in order to gain instructions and neither shall he repeatedly try to gain instructions in a way likely to cause offence.

1.2.9 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.

1.2.10 An estate agent must never misinterpret the value of a property in order to gain an instruction.

1.3.0 EXPLANATIONS TO THE STANDARD
1.3.1 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."

1.3.2 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.

1.3.3 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.

1.3.4 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
 

3.1.1 Inspections refer to the inspections of the property by prospective parties before buying or renting a property.

3.1.2 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
 

3.2.1 Upon commencing an instruction the estate agent should entertain queries regarding the property by any prospective party.

3.2.2 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".

3.2.3 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.

3.2.4 All inspections by prospective parties must be accompanied by a representative of the firm.

3.2.5 Estate agents should take due care to ensure that only genuine prospective parties are brought to inspect the property.

3.2.6 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).

3.2.7 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.

3.2.8 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.

3.2.9 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.

3.2.10 An estate agent, unless he is a registered valuer, shall not communicate in writing to any person 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.

3.2.11 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
3.3.1 Standard 3.2.2 should rid of the profession of "poster wars" that is the bane of the profession at present.

3.3.2 Standard 3.2.6 encourage s that in every property inspection a record of details of viewing by prospective parties is available.

3.3.3 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
4.1.1 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.

4.1.2 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

4.2.1 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.

4.2.2 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.

4.2.3 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.

4.2.4 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.

4.2.5 Any sub-listing secured through fellow estate agents shall not be passed to another agent without the consent of the main listing estate agent.

4.2.6 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.

4.3.0 EXPLANATION TO THE STANDARD
4.3.1 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.
4.3.2 The various type of agencies are as follows:-
4.3.2.1 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.

4.3.2.2 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.

4.3.2.3 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.

4.3.2.2 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.

4.3.2.3 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 adhoc basis and fees are paid only on successful conclusion of the estate agency transaction.
4.3.3 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 organised form of co-agency is Multiple Listing.

STANDARD 5 - CODE OF CONDUCT AND ETHICS
 

5.1.0 INTRODUCTION
5.1.1 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.

5.1.2 Towards this end, the Code of Conduct and Ethics, sets out the standards of behaviour required of estate agents in their provision of professional services and business activities.

5.1.3 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.

5.1.4 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 practised by the profession.

5.2.0 STATEMENTS OF STANDARD
5.2.1 An estate agent shall not conduct himself in such manner as to prejudice the professional status or the reputation of the profession.

5.2.2 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.

5.2.3 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, honour and courtesy, loyalty to his country and include a spirit of fairness and goodwill to his fellow employees and subordinates.

5.2.4 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.

5.2.5 An estate agent shall never publicly criticise his fellow estate agents or express an opinion of a fellow estate agent's transaction.

5.2.6 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.

5.2.7 An estate agent shall not mislead prospective parties by concealing or withholding material facts related to the property.

5.2.8 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.

5.2.9 An estate agent shall nor sanction a publication either in the press or elsewhere of his photograph as a prominent estate agent.

5.2.10 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.

5.2.11 An estate agent shall, in his practice, avoid any conflict of interest.

5.2.12 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 endeavour to settle it themselves.

5.2.13 An estate agent shall never make frivolous or vexatious complaints about other estate agents.

5.2.14 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.

5.2.15 An estate agent must make every attempt to avoid any conflict of interest, which might not be in the best interest of the principal.

5.2.16 An estate agent shall not perform legal services, for a fee.

5.2.17 An estate agent shall not allow any unauthorised person to carry on estate agency practice in his name without his direct and immediate control or without proper supervision.

5.2.18 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.

5.2.19 An estate agent shall not permit himself to be controlled or exploited by any person or body corporate in any manner whatsoever.

5.2.20 An estate agent shall not practise any deception on third parties.

5.2.21 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.

5.2.22 An estate agent shall exercise a reasonable standard of skill and diligence normally expected of his profession.

5.2.23 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.

5.2.24 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.

5.2.25 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
5.3.1 Conflict of interest includes but is not limited to the following situations:-
5.3.1.1 The estate agent must not keep from his principal or any other party involved in an estate agency transaction, information of his personal interest, be it direct or indirect.

5.3.1.2 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.

5.3.2 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.
5.3.3 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.
5.3.4 Exercise a reasonable standard of skill and diligence under 5.2.22 means adopt personal and professional standards demonstrating the qualities of proficiency, expertise, knowledge, objectivity, perseverance and a degree of care expected of a person in a given situation.
5.3.5 Examples of misrepresentation would include, but not limited to the following:-
5.3.5.1 Where an estate agent describes a purchaser as a "cash purchaser" where he knows that the purchaser is dependent upon financing.

5.3.5.2 To state that the property would fetch a higher price to the prospective purchaser when in actual fact it is an untrue statement.

5.3.5.3 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.

5.3.6 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
6.1.1 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 mis-representation and must not mislead the public as to the facts of the property.
6.1.2 Estate agents should recognise 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
6.2.1 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.

6.2.2 An advertisement shall comply with the following conditions:-

6.2.2.1 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;

6.2.2.2 That the said advertisement shall contain no comparative or superlative description of his practice;

6.2.2.3 That the advertiser makes no claim to be an expert in any specialised field;

6.2.2.4 That the name of the advertiser is not printed with undue prominence; and

6.2.2.5 That the published information must be factual.

6.2.3 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.

6.2.4 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.

6.2.5 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.

6.2.6 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.

6.2.7 All advertisement made by estate agents must display inter-alia the firm's registration number, the firm's name and telephone number.

6.2.8 The advertisement should be tastefully done.

6.2.9 The advertisement should not be written in glowing terms, which overstate the virtues of the property.

6.2.10 The advertisement should not explicitly solicit for business.

6.2.11 Corporate advertising is permitted under the following strict conditions :-

6.2.11.1 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.

6.2.11.2 The advertisement may contain the services offered by the firm and must not include claims that are laudatory in nature nor contain mission statements.

6.2.11.3 The advertisement must be in proper places and such places are magazines, journals, calendars, diaries, cinemas, electronic media, beriteks, airports and balloons. The express permission of the Board is required in advertising in any other places other than mentioned herein.

6.2.11.4 The advertisement should not contain any other statement or claim.

6.2.12 Flyers are permitted under the following conditions :-

6.2.12.1 The flyer must not solicit for listings.

6.2.12.2 The flyer must specify the type of property being sold or purchased or let or wanted for renting.

6.2.12.3 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.

6.2.12.4 Every flyer must carry the following statement :- "Persons 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".

6.2.12.5 A typical flyer that Board considers proper is as shown in the attached Form MEAS6 (see Standard 10).

6.2.13 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:-

6.2.13.1 The local estate agent must obtain written permission from the Board before the sale or marketing of the foreign property.

6.2.13.2 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.

6.2.13.3 The local estate agent must play a major role and actively participate in the transaction.

6.2.13.4 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.

6.2.13.5 Due prominence must be given to the local agent in all advertisements.

6.2.13.6 The approval number given by the Board shall be prominently displayed in all advertisements.

6.2.14 Directional signboards are permitted provided they comply with local authority requirements.

6.2.15 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 person or organisation or with any particular cause or matter or that he specialises in any particular type of work.

6.2.16 Estate agents are permitted to print and distribute business cards under the following conditions:-

6.2.16.1 The business card shall be in conformity with Rule 118.

6.2.16.2 In addition photographs and mission statements are allowed.

6.2.17 The firm may produce brochures provided they are in compliance with Rule 116.

6.2.18 Sponsorships are permitted provided the approval of the Board is obtained.

6.2.19 Posters and sign boards are permitted under the following conditions:-

6.2.19.1 They must be in compliance with Rule 122.

6.2.19.2 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.

6.2.19.3 Posters and signboards advertising the property must be tastefully done.

6.2.19.4 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 soever by a non- registered person with particular respect to advertising, promotion, marketing or management.

6.2.20 All estate agents shall not use blind advertisements, that is, advertisements that do not use the firm's name.

6.2.21 An estate agent may print the name and address of his firm and description as "Estate Agent" on his greeting card.

6.2.22 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.

6.2.23 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
6.3.1 Factual advertisements can have modern marketing aspects.
6.3.2 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.

6.3.3 Immediately means as soon as is reasonably practicable in the circumstance.

6.3.4 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.

6.3.5 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
7.1.1 Estate agency fees or commission is based on the Seventh Schedule of the Rules.

7.1.2 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, travelling (only where the distance between the agent's office and the property is 40 kilometres), other expenses actually incurred, cost of media advertisements, signboards, brochures and other promotional materials.

7.1.3 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
7.2.1 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.

7.2.2 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.

7.2.2.1 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.

7.2.2.2 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.

7.2.2.3 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.

7.2.3 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.

7.2.4 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.

7.2.5 The computation of fees payable for any transaction shall be as per the Seventh Schedule of the Rules.

7.2.6 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
7.3.1 Statement 7.2.1 would be in line with the common law on agency.

7.3.2 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.

7.3.3 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.

7.3.4 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.

7.3.5 Estate Agents are not entitled to deduct estate agency fees due to them from monies kept with them as stakeholders.

7.3.6 An estate agent shall not charge fees more than those prescribed in the Seventh Schedule of the Rules.

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