Is an illegal broker a Real Estate Agent?

Is an illegal broker a Real Estate Agent?



Real estate professionals are globally accepted to play a critical role in helping and assisting the public at large to sell, purchase, invest and to let or rent properties. They list and market properties, identify prospects who are qualified, negotiate the price and terms of sale and help guide both the clients and the customer through the property transactions.

The work of an agent is regarded as noble and what we do is called a ‘practice’ – a term referred to a ‘recognized profession’ in Malaysia. The Real Estate profession is governed by Act 242 i.e., The Valuers, Appraisers, Estate Agents and Property Managers Act 1981 and, regulated by a professional Board referred to as the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP).

“Estate Agency Practice” is defined in the Act as “acting or holding oneself out to the 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 or other disposal of land and buildings and of any interest therein or the purchase or other acquisition of land and buildings and of any interest therein or in respect of the leasing or letting of land and buildings and of any interest therein including the act of making known of the availability of land, building or any interest therein for such sale or other disposal, purchase or other acquisition, leasing or letting”.

It further adds that only estate agents with the exception of;-

  1. The land/building owner,
  2. A person with a power of attorney,
  3. A licensed Auctioneer who can auction the property and
  4. A negotiator considered an assistant to a real estate agent who helps in the sales & marketing of Properties can sell properties.

As such no one else can sell and collect a fee for services rendered as defined in the Act and if caught and convicted in court he can be fined not more than RM300,000 or 3 years imprisonment or both.

In Malaysia as compared to other countries in the world, we have three categories of practitioners;

  1. A Registered Estate Agent [REA] – as defined in the Act 242 a person whose name has been entered under Part IV of the Register and to whom an ‘authority to practise has been issued’ by the board under Section 16 of the said Act. To be a registered estate agent (REA), one would have to pass the board’s Written Estate Agents Examination Part 1 and 2 (or other equivalent recognized course of study) and the Test of Professional Competence (TPC). It is important to place importance on this as it takes an average of 5 to 7 years before a new Estate Agent is registered and recognized by law. Only a registered estate agent, can establish his/her own real estate agency practice by forming a body corporate, a partnership or sole proprietorship.
  2. A probationary Estate Agent [PEA] – is one who has passed the board’s Written Estate Agents Examination Part 1 and 2 (or other equivalent recognized course of study) who may then be registered as a probationary estate agent (PEA). He will undergo a 2 -year practical training before attending a ‘test of professional competence’ before being registered as a probationary Estate Agent.
  3. A Real Estate Negotiator [REN] – is a person who has attended a 2-day Negotiators Certification Course [NCC] and attached to a Real estate firm who will apply for a REN Tag with BOVAEP to assist the REA in the marketing of properties.

Anyone else involved in marketing or selling real estate is doing it illegally. The public at large are not aware that the role of an ‘Agent’ has very serious implications as to;

  1. protecting the interests of the client
  2. a duty of care to his clients
  3. fiduciary responsibility to all parties concerned
  4. cannot make a profit from the sale of rental
  5. not to collect more than the regulated fee of 3% and
  6. avoids any conflict of interests among others.

All monies collected are to be deposited into a clients account which is protected by professional indemnity insurance.

As such, we appeal to all, that it is very damaging on the real estate profession and its practitioners when reports are filed stating that ‘estate agents are caught or fined for cheating’, Another report said ‘Real Estate Agent on trial for intimidating teacher’ another report said ‘Former real estate agent charged with cheating over housing investment’. While we are not condoning cheating cases, we ask for the reports to state the real designations of those being reported. Is he a REA, PEA, REN or an illegal broker? The term ‘AGENT’ is used frivolously by all and not knowing the severity over the misuse of the name, it’s our hope that this message will help clear the doubt and uncertainty of who an Agent really is.

Over the years, we the practitioners have highlighted the wrong use of the word ’Real Estate Agent’ in many of the press reports resulting in directly tarnishing the image of registered estate agents. Just like Doctors, Lawyers, Engineers, Architects, surveyors, Valuers and other professions, Real Estate Agents need to be accorded the same respect as we are required at all times by law to carry the good name of the profession and the practice. The public needs to be aware that the real estate profession has a reputation to protect and not that ‘Badass’ picture that is painted in the press. We are concerned that Pubic confidence and trust levels are slowly eroding.

As such we kindly request editors, reporters, writers, copy writers, publishers and all parties concerned to be cautious, diligent, transparent and be true in the reporting based on whether the person being reported is a Real Estate Agent [REA] Probationary Estate Agent [PEA], a Real Estate Negotiator [REN] or an illegal broker. Public confidence and trust are the foundation that helps build good image of a profession resulting in having high esteem among those who are in the practice resulting in a high service delivery by its practitioners which then help grow the profession.


On behalf of concerned Registered Real Estate Agents

Soma Sundram

Past President MIEA

Registered Real Estate Agent

Email : [email protected]

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