The Renewal That Never Came Through
Kenny is a negotiator attached to a BOVAEP-registered estate agency firm. His REN registration expired on 31 March; his renewal file is still sitting at the Board because a supporting document is missing. Since expiry he has carried out six viewings, collected a RM5,000 booking deposit from a buyer and negotiated a RM620,000 subsale sale due to be signed next week. The firm's flyers and portal listings still carry his old REN number. Separately, the firm's administrative clerk - who has never been registered - has been answering enquiries and quoting rental terms and deposits to two landlords. The principal, a registered estate agent, says: 'The paperwork will catch up; the deal is done anyway.' A competing firm has now lodged a complaint with the Board.
1. Are Kenny and the administrative clerk in breach, and on what basis is the firm itself exposed?
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Kenny - yes. Registration under the Act is time-limited; when the term expires the person ceases to be a registered negotiator. A pending renewal does not extend the right to practise - the Board either renews or it does not. Everything Kenny did after 31 March (viewings, negotiating, collecting a deposit) is estate agency work done while unregistered. Continuing to display the expired REN number on flyers and portals adds a holding-out problem: the public is being told he is registered when he is not.
The clerk - yes. Quoting rental terms, deposits and terms of engagement is estate agency practice, not clerical work. Clerical staff may type, file and answer general calls; they may not negotiate or advise on terms.
The firm. The registered estate agent is the party to whom the licence is issued and carries the supervisory duty. It cannot book the output of unregistered persons and disclaim responsibility. Exposure runs three ways: (i) the firm's own registration is at risk in disciplinary proceedings for failing to supervise; (ii) commission earned through unregistered practice can be attacked as not lawfully earned; (iii) the statutory offence provision is directed at unregistered practice - cite the section and quote its penalty from the Act rather than approximating it.
Do not overstate: the vendor–buyer SPA is not automatically void because the introducer was unregistered. The problem is regulatory and financial for the firm, not the validity of the sale.
2. The RM620,000 deal completes. Can the firm keep the RM5,000 booking deposit and its commission?
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Separate the two pots of money.
The RM5,000 booking deposit was received from a buyer as stakeholder pending an SPA. Who is entitled to it depends on the terms of the offer form and the eventual SPA - forfeiture, refund or set-off against the purchase price. It does not become the firm's money because the negotiator was unregistered, and it does not become the firm's money if the sale aborts. It must be accounted for and, ideally, held in the firm's client account with a written statement of how it was dealt with.
The commission is the real exposure. The firm can argue the agency contract with the vendor was with the firm, and the firm is registered; but where the whole service was delivered by an unregistered person, the vendor has a credible argument that the firm did not lawfully perform, and a regulator can treat the commission as improperly obtained. Practical position: the firm should not treat collection as routine. It should (i) place a currently registered REN over the file, (ii) disclose the position to the vendor in writing, and (iii) be prepared to address the commission question openly rather than hope it is not raised.
Never advise the parties to backdate or re-paper documents to make it look as if a registered REN did the work. That converts an administrative lapse into a dishonesty allegation against the firm.
3. What should the firm do now, and in what order?
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- Stop the bleeding today. Kenny is removed from all client-facing agency work until his registration issues; no further viewings, negotiations or receipt of money. The clerk is confined to clerical duties.
- Protect live transactions. A registered REN takes carriage of the RM620,000 file and the two rental enquiries. Both sets of clients are told in writing who now acts for them, without disclosing internal blame.
- Fix the advertising. Remove the expired REN number from flyers, portal listings, signboards, email signatures and WhatsApp templates. Re-check every live listing.
- Complete the renewal and hold the acknowledgment on file before Kenny returns to client contact.
- Control the money. Reconcile the RM5,000 deposit, issue a written account to the buyer and confirm the position to the vendor.
- Deal with the complaint honestly. Respond to the Board factually and on time. Voluntary disclosure of a lapse that has been cured is treated differently from concealment. Take advice before responding.
- Close the systemic gap - a registration expiry register with a 60-day trigger, a rule that no one negotiates without a live number, and a requirement that all deposits go through the firm's account, not an individual's.
The examinable point is sequencing: stop practice, reassign, remediate, then report - not the reverse.