Estate Agency In the provision of estate agency service, an
estate agent is now guided by the ESTATE AGENCY ACT in
regards to the estate
agency regulations, guidelines, code of ethics and
professional conduct.
An estate agent act for the principal/ property owner wishing to sell
his /her property or landlord wishing to lease his/her property.
An estate agent can also act for Third Party in an agency
relationship for a buyer of property or a tenant.
The estate agent's authorisation, duties and rights, as defined
and regulated by CEA, are to be governed by way of
express standard agreement in writing. Verbal and oral engagement or
implied agreement must be followed up by email to establish the vendor's
consent and agency relationship in writing in accordance with CEA.
Types of agency
Sole agency - Owner may not appoint other agents during the
period of sole agency ( a specified time or if not stated a
reasonable time) in force. In exchange, the agent will use his best
efforts to find purchaser or tenant for his client's property. However,
owner may sell or rent by his own efforts, in which case he is not
obliged to pay a commission to the agent.
Sole and exclusive agency - Owner may not appoint other agents
during the period ( a specified time or if not stated a reasonable time)
in force. Owner also may NOT sell or rent by his own efforts, and if he
does sell his property, he is obliged to pay a commission to the agent.
Sub-agency / Conjunction Agency -A sole agent may enter into
commission-sharing agreements with sub-agents. The sub-agent will
conduct all offers, negotiations and other interactions with Third
parties through the sole agent who is acting for the owner. There
is no relationship between the owner and the sub-agent. the Principal is
not accountable for the sub-agent's action- only the main agent's. The
appointed agent is entitled to the full commission from the owner if any
of his sub-agents succeed in finding a purchaser, but he is responsible
for paying the agreed share of commission to the successful
sub-agent based on the terms of the commission sharing agreement/
co-brokerage agreement.
Joint sole agency/ co-brokerage- This is a sole agency whereby
2 or more agents are appointed to co-operate on the sale or lease
of a property. the commission is either shared in a pre-arranged manner
between agents or only a successful agent will earn the commission.
Agency authority - Duties of agent.
Duties of an estate agent
Duty to act and perform - acting in utmost good faith and to make
best endeavours to bring about a sale for the fee/commission or at
least reasonable endeavours if it is impossible to carry out what he has
been commissioned to do and informing the principal of the
reasons.
Duty to follow instruction-Bound to obey the instructions of
principal and to clarify with principal 's intentions, if the
instructions are unclear, and provided the instructions are reasonable,
lawful and fall within the scope of the agency agreement.
Duty to exercise reasonable care and skill- Display an understanding
of the practice and procedures involved in the real estate agency-
informing principal of a better offer , misrepresenting or
misinforming property information to prospective purchasers ... and a
higher standard of care will be imposed if he is paid for
higher level competence, professional advisory role.
Duty not to delegate - Duty to perform personally what he has
undertaken to do and not to delegate unless specifically authorised or
informing the principal and the principal is aware that the agent is
delegating to a personal assistant.
Duty to keep separate accounts- in relation to transactions / funds
and accounts of the principal and account for all monies
receive on behalf of the principal.
Duty to act honestly- an agent must act in good faith and honesty
when discharging his duties.
Limits of authority.
No authority to enter into a contract on behalf of owner unless
special authority by way of Deed of Power of Attorney.
No authority to retains monies and only hold
in trust for the benefit of the owner unless
otherwise expressly authorised
No authority to delegate to sub-agents or misrepresent or
warrant conditions of the properties...etc
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