In the Malaysian property market, many property owners do not know how to
differentiate between a licensed real estate agent and a bogus one. So
often they are either cheated or not happy with the way a bogus agent goes about conducting their business.
Licensed Agent
In
order to become a licensed agent, one must study and pass all the
exams set by the Board of Valuers, Appraisers and Estate Agents under
the Ministry of Finance (the Board). The whole process may take several
years to complete. Once a member passes the entire exam, a license will
be granted bearing an E number, i.e. E1234. If he wishes to run a Real
Estate firm, he needs to register his company with the Board and
another E number will be given for his firm. The E number together with
the Board logo should appear on his calling card and all advertising media.
All
licensed agents are regulated and governed by the Board subject to
the rules and guidelines set by the Board. Any licensed agent found to be
in violation of the rules will be penalized by the Board, and depending on the
seriousness of the case, the Board might at it discretion, suspend
or terminate the license holder.
All licensed agents are
required to renew their license on a yearly basis. Before a licensed
agent can renew his license, he must proves to the Board that he has
obtained sufficient credit hours by attending courses or training
programs approved by the Board throughout the year. This is to ensure
all licensed agents are equipped with the latest market information and aware
of the changes in the Real Estate Business both locally and globally. This
also serves to maintain the professionalism of a licensed agent.
On top of the above, the Board
ensures all licensed agents are insured with Professional Indemnity
Insurance. This is to protect the licensed agent against compensation
sought by a client if he has made mistakes or is found to have been
negligent. Professional indemnity insurance will also cover any legal
costs.
Most professionals carry professional indemnity cover. Just like a lawyer, accountant or financial adviser.
Below is a table showing the difference between licensed real estate agenst and bogus agenst.
| | Licensed RE Agent | Bogus Agent |
| Regulating Authority | The Board | None |
| License | Issued by the Board | None |
| E-number | Every licensed agent has an unique E-number | None |
| Operating Office | Only Licensed Agent is allowed to open and run an RE office | Anybody |
| Rules and Guidelines To Adhere | Set by the Board | None |
| Commission Rate | Set by the Board | None |
| Disciplinary Action | By the Board | None |
| Examination | All members must passed the exams set by the Board before their license is issue to them | None |
| Continuous Training and Market Update | Yes | None |
| Professional Indemnity Insurance | All members are insured | None |
| Reporting Complaints | To the Board | None |
In order to know if an agent is licensed or not, you may log on to the Board website at http://www.lppeh.gov.my
and perform a search. You may search by using the company name, full
name of the agent or E number. If he or she is a licensed agent his or
her particulars will appear, so as the company search.
Bogus Agents
A Bogus
Agent is someone who acts as an agent to carry out real estate
businesses or transactions without a valid license issued by the Board.
Under Malaysian law, if
someone were caught performing Real Estate transactions without a valid
license, once caught and convicted, he or she could be faced with a
maximum fine of RM25,000, imprisonment or both.
As of today, despite the
Board and the Malaysian Institute of Estate Agents (MIEA) persistent efforts in stopping bogus agents, there are still about 10,000
bogus or illegal agents actively involved in the property market.
From time to time, we have
heard or even seen in the newspaper how someone was cheated or mislead
by a bogus agent. But why there are still so many bogus agents in the
market?
This can be attributed partly to the lack of
awareness by the public of the existence of bogus agents. Some such
agents may offer much more attractive commission rates to the property
owners for the services they provide. Some lure the
property owners into dealing with them by giving all sort of empty
promises.
Why bogus agents will not
provide a good service to the public? Firstly, they are not under any
watchdog or governing body which they can conduct business anyway they
like. For instance, you may see some hand written "To let / For Sale"
sign nailed on tree trunks. Under the Boards ruling, a licensed agent
is not allowed to do so.
Secondly, they normally do
not have permanent office, therefore if they have done anything wrong,
they can simply move to another location and start all over again.
Whereas all licensed agents are required to register their office
address with the Board, in the event, if there is any wrong doing of a
particular licensed agent, the Board knows where to find them.
Thirdly, bogus agents are
not professionally trained in handling property transaction, especially
matter relating to laws, they might mislead or provide wrong advice to
their customer, caused them entered into contract with other parties
and ended up with legal suit. Some of their customers thought that they
get some saving by paying fewer fees to bogus agent but ended up paying
more in law suit.
Another reason why they
are not ethical in there practices is because they do not intend to
stay in the business for a long time, once they have earned there
money, they might just moved on. Unlike licensed agents where they
decided to make real estate business as their career and spent years to
obtain their license, they will not give up their business easily and
they will adhere to all rules imposed by the Board.
Furthermore, they will
maintain their highest standard and professionalism to keep their
customers happy and look forward for future business or new business
referred by their customers. Therefore for them, their customer's need
always comes first.
Dealing With Bogus
Below are some of the problems faced by property owner who dealt with bogus agent before:-
| Not professional | Lack of Real Estate education and professional training | Well educated and trained, especially laws related to contract and land |
| Collected deposit and disappear | Most of the bogus agent do not have a permanent office | An office registered to and approved by the Board |
| Charged a high fee | They charge a fee according to their liking | Charge according to the Scale Fees prescribed by the Board |
| After collected commission, they never finished the job |
It
is very common for them to do so, because all they care is the
commission, they are not in for a long term business relationship |
To
most licensed agents, RE is their rice bow, they will perform their
best, so that customers will keep coming back or refer clients to them |
| Not happy with their service and wish to complain | Nobody to complain to as they are not regulated | To the Board, the Board will penalized those wrong doing ones, some to the extend of suspending or terminating their license |
| Managed to sue and win a court case against a bogus agent for misrepresentation, however, he has no money to pay compensation | They do not have insurance to cover their loses | All Licensed Agents are insured with Professional Indemnity Insurance to protect them from loses claimed against them. |
Negotiator
However,
you may encounter many "agent" whom they called themselves
"Negotiator", they are not bogus agent but these are assistants hired
by the licensed agent to help them in their work.
Conclusion
As
a wise property owner, the best choice is to choose a licensed Real
Estate Agent for their commitment and professionalism in conducting
their business.
Furthermore, licensed
agents are more willing to invest in human resources, training programs
and technologies to assist their day to day operation. As a result all
this will enable them to serve their customer better.
