Real estate groups say no to illegal brokers operating under tech and innovation guise

PETALING JAYA: Five real estate associations have collectively cautioned the public to deal only with real estate agents and firms registered with the Board of Valuers, Appraisers, Estate Agents and Property Managers (Bovaep) when engaging any person or persons to carry out real estate services, including selling, buying, renting, leasing, tenancy administration and provision of advice.

In a joint statement issued by the Royal Institution of Surveyors Malaysia; Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia; Persatuan Perunding Hartanah Muslim Malaysia; Malaysian Institute of Property and Facility Managers; and Malaysian Institute of Estate Agents (MIEA), the associations pointed out that there are people who are not estate agents but are operating estate agency business illegally, and “using many forms of creative ideas to do so”.

The associations said, traditionally, the illegal brokers are individuals who act intermediaries to introduce buyers or sellers. Today, the profession has matured and organised firms are providing excellent services to the community. It is under these situations that various setups appear under the guise of providing other services but indirectly carrying out real estate services.

“They call themselves financial consulting firms, tech firms, project marketing firms etc, with technology behind them. Today, they not only do the work illegally but are challenging Act 242 openly and questioning the validity of what the government expects the professionals to do and directly undermines the sanctity of the real estate profession.

“As national associations representing the various disciplines under the Act, we cannot watch and see the eroding of this moral, legal and fiduciary responsibilities by illegal brokers which undermines our work as registered practitioners. We also have a moral duty to protect the profession and request the authorities to do what is necessary to check the growing menace of illegals and the impact they are having on the profession and the public.”

The associations added that the public should also check the validity of the practitioners before engaging them and not to pay any fees if they are found not to be registered and make complaints to Bovaep if they have been misled.

“We are not against innovations and technology, but we want to reinforce our stand that we cannot condone anyone, either individuals or companies, in any form or shape, who do not comply with existing laws of the land where it fits as far as real estate agency practice is concerned,“ the statement said.

Last week, home rental platform Speedhome urged MIEA to change its perspective on seeing tech companies as illegal brokers, disagreeing with MIEA’s statement on tech companies trying to bypass the law. Speedhome disputed MIEA’s viewing of the property industry that only real estate practitioners are allowed to serve the public, undermining the work and innovation of tech companies that have created new solutions and value for the market.

Meanwhile, citing that real estate service is gazetted as a “professional service” under the Valuers, Appraisers, Estate Agents and Property Managers Act 242, 1981, to protect the public, the five associations said this is also to ensure that anyone other than those registered carries out the work as an agent in any form or manner will be committing an offence and can be charged in court, and fined not more than RM300,000 and imprisoned for not more than three years or both, if found guilty.

“While this is the law, many have found the work of an agent lucrative and have jumped in to provide real estate services. This then defeats the purpose of an Act of Parliament which is designed primarily to protect public interest and to detail out the professional obligations of what an estate agent should and should not do within the ambit of the law.”

The associations said the process to be registered as a real estate agent and to register a real estate firm is rigorous to ensure compliance with the law. Real estate agents take a minimum of four years to be registered after examinations and practical training before setting up real estate firms. Real estate negotiators (RENs) are salespeople employed by registered firms after completing a negotiators certification course and are issued with a REN tag, and are under the direct supervision of a registered estate agent. Any wrongdoing on the part of the salesperson (REN) will render the REA responsible and accountable and as the regulating body Bovaep will take the necessary action.

The associations pointed out that the profession is relatively young and is regulated by Bovaep to protect the public against unethical practices.