20180726 (Thu)
What is the difference between a REA and a REN? I see my friend operating a Sales Consultancy company doing real estate business, but he isn’t a REN or REA! Part 3 of 3.
The amended VAEP Act 1981 (2017 amendment) included the “Real Estate Agency Consultant” as exclusively used in estate agency practice. The other names, styles or titles are:
“Estate Agent”, “House Agent”, “Property Agent”, “Land Agent” and “House Broker”. The law in S.22C of VAEP Act, 1981 in fact put “or the equivalent thereto” as restricted use for the profession of estate agency practice.
When the person is holding out to public as any of the above name without a valid authority to practice under S.16 VAEP, 1981, it contravenes the law, and punishable under S.30 of the Act. Its maximum punishment is RM300,000 and/or 3 years jail term.
However, people hide behind the wordings. The name of their company or firm would be called “XYZ Consultancy” so, they are not agency firm. The distinct difference in the daily activity of these firms is “advice” and they cannot act as real estate agents. There is nothing a client can hold them to in dealing with the principal – usually the vendor or developer.
It simply means when you deal with these “XYZ Consultancy”, you have no legal position to protect whatever you paid for (e.g. a booking of a property)!
The service that they can provide is none other than some ‘advice’. It is key to highlight that they cannot charge a transaction for a commission. When money is paid for a service on transaction (e.g. % of the transacted property), then it contravenes the legal purview of the Act for Estate Agency Practice.
Tomorrow, we will continue with this case.