The Expired Licence and the Impatient Buyer
Yusuf is a licensed sales agent whose licence expired on 3 March. On 5 March he signed a reservation form with a buyer for a BD 180,000 villa, accepting a BD 5,000 reservation deposit into his personal account. He told the buyer his renewal was 'in process'. In fact he had not yet submitted the renewal application because his employer's commercial registration had lapsed, and he had not completed the 15 CPD hours required for the cycle. On 20 March the developer told Yusuf the unit had already been sold to another buyer. The buyer now demands the BD 5,000 back and has threatened to complain to the regulator. Yusuf's employer says the reservation form was signed 'in the company's interest' and asks Yusuf to keep the deposit until a replacement unit is found.
1. Identify every licensing and conduct failure in this scenario and explain which are attributable to Yusuf personally versus his employer.
Read the worked answer
Yusuf's failures are personal and cumulative:
- Acting on an expired licence. From 3 March he was no longer authorised to conduct sales activity. Signing a reservation form on 5 March is unlicensed activity, regardless of whether renewal was pending.
- Misrepresentation. Telling the buyer renewal was 'in process' was false; no application had been filed. This is a conduct breach independent of the licence lapse.
- CPD shortfall. He had not completed the required 15 hours, which is a renewal precondition - he cannot cure the lapse retroactively.
- Client money handling. Taking the BD 5,000 into a personal account breaches the segregation principle: client/reservation deposits must not be commingled with personal funds.
The employer's failures are institutional: its commercial registration lapsed, which blocks the agent's renewal and means the brokerage may itself be operating outside its authorisation. Instructing Yusuf to retain the deposit after the unit was sold elsewhere compounds the problem and looks like conversion of client money.
The 'in the company's interest' defence fails: an instruction to breach licensing and client-money rules is not a lawful instruction, and Yusuf remains personally accountable for his own conduct.
2. The buyer wants the BD 5,000 returned immediately. Outline the correct sequence of actions Yusuf and his employer should take, and explain what should happen to the deposit and to the regulator relationship.
Read the worked answer
Immediate (within days):
- Refund the full BD 5,000 to the buyer without deduction. The unit was never available, so there is no contractual basis to retain any part of it; retention would expose both parties to a complaint and potential disciplinary action.
- Transfer or refund from a properly controlled account and document the payment with a receipt and bank record.
Corrective:
- Yusuf must cease all sales activity until a valid licence is issued. He should not sign reservation forms, advertise, or negotiate.
- The employer must restore its commercial registration, then support a fresh application (not a backdated renewal) evidencing completed CPD hours.
- Yusuf should complete the outstanding CPD before reapplying.
Regulator relationship:
- Do not wait for the buyer's complaint. A voluntary disclosure explaining the lapse, the refund, and remedial steps is generally treated more favourably than a reactive defence.
- Preserve all records: the reservation form, bank statements, correspondence about the 'in process' statement, and the refund proof.
Practical point: refunding promptly and documenting it converts a potential enforcement matter into a compliance lapse with a clean remedy.