Differences between MEAS 2014 & MEAS 2018, Standard 4.
Standard 4 – Estate Agency Fees.
This standard is not just key to the income of an agent but also the most common disagreement with clients. Although the amended (2017) VAEP Act included Tenancy Administration, there is no new standard in MEAS 2018 on this. Amidst, certain areas are added to reduce ambiguity:
4.2.5 can vary the rule that all conditions must be satisfied (unconditional) before fees are due – which means certain charges can be payable even though the instruction given has yet to come to completion. However, this exception comes with a prior written consent (a separate document) from the client, clearly stating and explaining that the fees are still due for payment although certain conditions are NOT met. Those conditions are to be specified.
Many parts where “plus all disbursements” are added to “fees” (professional fees and commissions). This is to clearly include disbursements which are separate from “fees”.
4.2.11 “Rent Review/Renewal” is added to signify such area of charge for renewal of lease.
Deleted “appointment” as following Standard 3, “engagement” is used as the correct term.
Deleted “letting/leasing” replaced by “tenancy/lease”
4.3.2 Emphasis that “unconditional” be included in Tenancy/Lease agreement and not just Sale & Purchase Agreement.
4.3.4 Inserted “State Authority” and removed “Foreign Investment Committee”.
In 4.3.5 Determining Sales Consideration, (c) “share or equity swap” being added (other than joint venture). It should be “HIGHER” instead of “LOWER” value being used to ascertain fee calculation. This is similar to the concept of Stamp Duty ad valorem duty calculation.
The Standard is added with examples of how a separate written consent is to be given despite conditions not met, for fee payment to be due. These examples are:
a. Despite State Authority approval is pending, fees are due.
b. Despite certain conditions not met, fees are due.