Standard 3 2018

MALAYSIAN ESTATE AGENCY STANDARDS

Go here to read the differences from Standard 3 MEAS 2014.

STANDARD 3

TYPES OF ESTATE AGENCY ENGAGEMENTS

3.1.0 INTRODUCTION

3.1.1 It is important for the client, the estate agent and any other related third party to be aware of the different types of estate agency appointments engagements under which properties are listed, sold, purchased, let or rented through estate agents.

3.1.2 It is equally important that the type of estate agency appointment engagement is agreed between the estate agents and Client prior to the estate agency appointment engagement.

3.2.0 STATEMENTS OF STANDARD

3.2.1 Before executing the Letter of Engagement/Appointment, the Estate Agent shall take reasonable steps to explain and acquaint the Client with the types of estate agency appointments engagements and amplify on the differences between the various types of estate agency appointments engagements including its implications and repercussions.

3.2.2 Before accepting an appointment engagement as an exclusive or sole agent, the estate agent shall enquire from the Client confirmation as to whether there is any current exclusive or sole agency appointments engagements executed with other firms.

3.2.3 An estate agent upon becoming aware of an exclusive or sole agency appointment engagement with another firm shall work on a co-agency basis in respect of that property with the exclusive or sole agent and not with the client for the duration of the appointment engagement.

3.2.4 When a firm that is not appointed an engaged firm (Listing Agent) enters into a co-agency arrangement with an appointed firm a firm that is not engaged (Co-Agent), the appointment engagement terms of the listing firm (Listing Agent) shall be respected by the other firm.

3.2.5 Any listings secured through co-agency shall not be passed to another firm or its branches or subsidiary without the consent of the listing firm.

3.2.6 The acceptance of an exclusive or sole agency places upon an estate agent the strongest obligation to render estate agency services to the expectations of the Client.

3.3.0 EXPLANATIONS TO THE STANDARD

3.3.1 Estate agency engagements are governed by the Principal-Agent relationship under the Contracts Act 1950 and it is therefore important for Estate Agents and Negotiators to understand their respective obligations under the Law of Agency.

3.3.2 For the purposes of 3.2.1 “reasonable steps” means that at a minimum the firm must explain to the client the differences between the various types of agencies and its implications.

3.3.3 The various types of estate agency appointments engagements are as follows:-

3.3.3.1 Exclusive Agency

This refers to the instructions from a client to a single firm to act on his behalf. The client may make introductions and will leave the closing of the transaction to the firm. The client must pay the appointed estate agency firm the agreed fee even if the firm was not the effective cause of the transaction after having carried out his due obligations and responsibilities as an estate agent.

3.3.3.2 Sole Agency

In a Sole Agency appointment, a single estate agency firm is engaged. The Client may however, wish to reserve the right to market and conclude the deal himself without the services of other estate agency firms. In this instance, the client and the appointed sole agent shall agree on the fee based on a pre-agreed formula.

3.3.3.3 Joint Agency

This is where more than one estate agent is appointed engaged and only the estate agent who closes the deal gets paid. The number of agents appointed is limited and each is aware of the appointment engagement of the others.

3.3.3.4 Ad Hoc Basis or commonly referred to as “Open Listing”

The Client may engage an unlimited number of estate agency firms on an ad hoc basis and fees are paid only to the estate agency firm which has upon successful conclusionded of the estate agency transaction.

Ref: Verbatim from Standard 3, MEAS 2018.