I want to represent my developer friend to help sell his projects, can I get my NCC (Negotiator Certification Course) and then become his REN (Real Estate Negotiator)? Part 2.
Having understood the reason why a REN comes into existence, now we can answer the above question.
The developer is governed by a separate Act of Parliament – Housing Development (Control & Licensing) Act, 1966. Hence, all its dealing with public (sales and promotion) comes under the purview of this law. An employee of the developer can promote the properties for sale, let or lease because it is the product of his company – ownership is his company. He does NOT need to be a REA or a REN.
S.22C (2) of Valuers, Appraisers, Estate Agents and Property Managers Act, 1981 (hereafter VAEP Act 1981) provides 4 subsections which are exceptions to estate agency practice.
What this means is under S.22C (2), certain situations are not considered as “Estate Agency Practice”. These are dealings done by:
a) an owner of any land, building and any interest therein
b) a licensed auctioneer
c) a holder of power of attorney
d) a negotiator may assist the REA in the EAP.
Therefore, a developer can directly sell his properties to the public by having his own salespersons. The developer has ownership (or control) to dispose of its products (properties). However, in the current slow market, developers are cash tight to pay salary. This made situation of engaging third party agents an alternative.
Now, when the outside person (not employed by the developer) is engaged, then it becomes “estate agency practice”. In this situation, it is under the purview of VAEP Act, 1981.
The reason is anyone who holds oneself out to public or to any individual or firm as ready to act, for a commission, fee, reward or other consideration, as an agent in respect of the sale/purchase/let/lease of property is performing “real estate agency practice”.
And, “estate agency practice” is to be regulated by VAEP Act 1981.
So, a REA can be engaged to represent the developer to sell the stocks. The REA firm would have their RENs properly appointed and carry out the job of selling in the premises of the developer. In other words, the RENs are placed there by the REA who is appointed by the developer company.