The Unverified Referral Network
Nadia is applying for a sales agent licence. Her application is sponsored by a brokerage whose commercial registration is valid. Her qualifications: a diploma in business, no prior property experience, and a certificate from a 3-hour online 'real estate essentials' course. She has not yet completed any AML/CFT training. Her application lists a referee who is her uncle, a retired banker, and states two years' experience at a firm that closed; she has a letter from a former colleague confirming the role but no employment records. Separately, Nadia plans to earn referral fees by introducing buyers to a developer's off-plan project, and asks whether she needs anything beyond her agent licence for that.
1. Assess Nadia's application for likely deficiencies and state what she should do before submitting.
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Likely deficiencies:
- Experience evidence is weak. A colleague's letter is better than nothing but is not independent verification of two years' work. She should obtain whatever she can: employment contract, salary records, project files, or a letter from a former principal. If she cannot substantiate the claim, she should state the experience she can prove rather than overstate it - an inaccurate application is a conduct risk.
- Referee conflict. Her uncle is not an arm's-length referee. She should nominate a professional referee unconnected to her, ideally a former supervisor.
- Training is thin. A 3-hour online course is unlikely to satisfy a substantive qualification requirement on its own; she should check the minimum education/training standard and supplement it.
- No AML/CFT training. AML/CFT is core to the role. Completing a recognised AML/CFT course before submission strengthens the application and is required for CPD anyway.
- Sponsor check. The brokerage's registration is valid, but she should confirm it is authorised for the activity she will perform and that the sponsorship names her correctly.
Before submitting: gather verifiable experience evidence, replace the referee, complete AML/CFT training, and review the application for accuracy line by line.
2. Nadia asks whether her agent licence alone covers earning referral fees from a developer's off-plan project. Advise her on what she must check.
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A licence is necessary but not automatically sufficient for every activity. Nadia must check four things:
- Scope of the licence and sponsor. Her licence is tied to her sponsoring brokerage. Referral activity may need to be conducted through that firm, and the firm's registration must cover the activity. Earning fees personally outside the sponsor can look like unlicensed or undisclosed activity.
- Referral fee arrangements. Introducing buyers for reward is a regulated activity in many regimes. She should confirm whether referrals require a written agreement, disclosure to the buyer, and recording in the firm's books - and whether the fee must be paid to the firm rather than to her personally.
- Developer relationship and disclosure. She must disclose the referral arrangement to buyers; undisclosed commission is a conflict-of-interest and conduct breach. Off-plan sales carry additional disclosure obligations about project status and escrow.
- AML/CFT duties still apply. Introducing buyers is part of the transaction chain; she must conduct CDD on the buyers she refers and report suspicion. A referral fee does not make it a 'passive' introduction.
Practical step: get written confirmation from the regulator or the firm's compliance function on whether referral fees fall within her licensed scope before she accepts any payment.