Types of Agency AppointmentsREAL ESTATE LAW (D08) MALAYSIA

EXCLUSIVE

AGENCY

•Instruction from a Principal to a single Estate Agent to act on his behalf.

•Principals may make introduction but leave the closing of the transaction to the EA

•Principals must pay the appointed EA the agreed fee even if the EA was not effective in the cause of the transaction

SOLE AGEN

CY

•A single Estate Agency was engaged.

•The principal may close deal by himself and not obliged to pay the EA his agent fee if the EA was not effective in the cause of tranx

•Principal can choose to make a discount in fee on an arrangement made.

SOLE JOINT AGEN

CY

•The EA works together with the Principal as a team the the fee is divided on a pre-agreed formula.

•The principle has the flexibility to compensate additional estate agent and at the same time maintain the advantage of having one EA in control

JOINT AGEN

CY

•Where more than one Estate Agent is appointed and only the one who closes the deal get paid the agent fee

•The no of E A appointed is limited and each is aware of the appointment of the others

AD HOC BASIS

/ OPEN LISTIN

G

•Principal can engage an unlimited number of EA on an ad-hoc basis

•Fees are paid only on successful conclusion of EA trax.

Client’s Account –Open, Maintained, Operation and Consequences

Refer to MAAS, Std 8 & VAAEA Rules 1986 Part Viii Rules 49-61A client’s account is:a) Current account open in the name of the registered firm at a bank in while the title contains the word

‘client’b) Separate account open in the name of the person designated in writing by the principal which the

registered firm has power of withdrawal on the signature of the sole proprietor, partner or other authorised person connected with the registered firm.

Client’s Account –Open, Maintained, Operation and Consequences

MAS Scheduled 82. A client’s account is necessary and should be opened.a) As there is a need for the registered firm to be accountable for the

money belonging to client received on behalf which registered firm is acting as the stakeholder.

b) The purpose of maintaining a client’s account is to ensure that the monies entrusted to registered real estate agent are:i) Paid into a separate designated account

ii) Properly recorded in the accounts maintained by the REAiii) Properly monitored

Client’s Account –Open, Maintained, Operation and Consequences

3. The client account should be maintained and operated as follows:a) A registered firm that holds money must keep at least one client’s

account.b) Where the registered firm holds/ received a chq/ banker’s draft/

money order which include client’s money, it shall pay such che/ draft/ money order into the relevant client’s account.

c) All interest accrued in the client’s account is to be accounted to the client.

d) It is mandatory for a client’s account to be insured with a professional indemnity insurance.

e) No money other than the monies which the firm is required to pay into the clients ‘account.

f) No money shall be drawn from the client’s account except;i) When required to pay to or on behalf of the clientii) Reimbursement of monies expended by the registered firm on

behalf of the clientiii) Towards payment of a registered firm’s fees/ disbursementiv) By a chq drawn in favour of registered firmv) A transferred to a bank account in name of registered firm not

being a client’s accountvi) Under sign of EA/ partnered/ authorised person employed by the

firm / a person expressly authorised by Boardvii) - prvided that any such signatoryis covered in the registered

estate agent’s firmviii) ) Professional indemnity insurance policyix) Fidelity guarantee insurance policy

Client’s Account –Open, Maintained, Operation and Consequences

4. Every registered firm shall keep proper books and records to show its dealing with:i) All client’s money received, held/ paid by itii) Any other money dealt with by it through a client’s account.

iii) A register of all client’s accounts must be maintainediv) Once in each period of 12 mths, a registered firm shall delivery to

the Boart no later than 6 mths after the end of the accounting period to which it relates:

v) A certificate as prescribed in 8th Scheduled signed by the registered agent that during the accounting period covered, it did/ did not received / hold client’s money and

vi) If it did, an auditor’s report issued by a firm of recognised professional auditors in the form prescribed in the 8th schedule relating to the accounting period.

Consequences of EA Failing to Maintain a client’s account

1. A Registered Estate Agent shall be held jointly and severely liable for any contravention of any provision of VAAEA Act 1981.

2. Unless he can prove that he has taken all steps as may be reasonable to ensure that such contravention shall not be committed he may declare free of liability for such contravention.

Consequences of EA Failing to Maintain a client’s account

For matter concerning professional misconduct of the EA:BOARD sends a Notice of Complaint to the EA

May refer to misconduct to:i) Complaints Investigation Committee (CIC)ii) CIC investigates

iii) CIC makes report

iv) CIC send report to the Board

v) If Board decides a prima facie case is present, will refer to Disciplinary Board.

vi) EA has to give an intention to appear/ reply to charges within 21 days of receipt of Notive of Complaint from Boardvii) Disciplanary Board to meet after Registrat appoints time, date, place

viii) EA is entitled to appear before the Board a) To explain/ rebut withnesses either by writing/ in person otherwise Board can elect to proceed without any further reference to the EAb) Board can decide to either dismiss the charges or

Consequences of EA Failing to Maintain a client’s account

For matter concerning professional misconduct of the EA:Board can make an order to:

i) Cancel EA’s registration by removal of his name from register

ii) Suspend his practice < 3 years

iii) Admonish him and record in Register

iv) Adminish him or impose fine of < 5k / both. With no record in Register

v) Fine 10K and record such fine in Register and that he is suspended from practice until such fine is paid.

Can’t account for monies to client

1. The firm is liable to make good the monies to the client, either personally/ through an insurer (i.e. professional indemnity insurance)

2. The REA can within 30 days of being notified of the order may make an appeal to Appeal Board.