Estate Agency Law, Practice and Professional Conduct
This domain tests how an estate agent is appointed, paid and regulated in practice under the Valuers, Appraisers, Estate Agents and Property Managers Act 1981 (Act 242). Questions focus on authority to practise, the estate agency agreement, client money, conflicts of interest and advertising.
Authority and appointment
Estate agency may only be carried on by a registered estate agent holding a current authority to practise; the firm must also be registered. The agent should be appointed in writing on the Board's prescribed estate agency agreement before marketing. The agreement identifies the property, parties, scope, commission, duration and termination. Oral appointments create evidential and disciplinary risk.
Client money and conflicts
Client money, including deposits and rents held for others, belongs in a separate clients' account, not the office account. Records must be kept and professional indemnity insurance maintained. A conflict arises if the agent acts for both seller and buyer, or has a personal interest. Full written disclosure and informed consent of both parties are required; otherwise decline one side. Secret profit or undisclosed referral fees are breaches.
Worked example
An agent is appointed by a seller, then the buyer asks the same agent to look after his side and offers a second commission. The agent may accept only after disclosing the dual role in writing and obtaining both parties' informed consent, and must not use one party's confidential information against the other. If consent is refused, the agent must choose one party and cease acting for the other. The reasoning is that the fiduciary duty of loyalty comes before the extra fee.
Traps
- Relying on a verbal appointment and later claiming commission.
- Banking a deposit into the firm's office account.
- Acting for both sides without written consent.
- Paying referral commission to an unregistered person.