BOVAEP REN NCC cheat sheet

Act 242 (Valuers, Appraisers, Estate Agents and Property Managers Act 1981) establishes BOVAEP and makes unregistered estate agency practice an offence.

A Real Estate Negotiator (REN) must be registered with BOVAEP through a registered estate agency firm; the REN tag bears the registration number and is produced on request.

A REN cannot practise independently, sign agency agreements as principal, or hold client money; the agency contract is between the client and the firm.

Estate agency fees are prescribed by the Act's fee schedule: sale commission capped at 3% of the sale price, letting commission capped at about one month's rent for a standard term.

Firms must maintain a client account and keep client funds separate from office funds; commingling is a disciplinary offence.

Practising without registration, or a firm employing an unregistered negotiator, exposes both the individual and the firm to prosecution and disciplinary action.

BOVAEP disciplinary sanctions range from warning and fine to suspension or revocation of registration.

Continuing professional development and annual renewal requirements must be satisfied to keep registration and the REN tag valid.

A binding contract needs offer, acceptance, consideration, intention to create legal relations and capacity; the Contracts Act 1950 governs these in Malaysia.

Acceptance must be unqualified and communicated; a counter-offer destroys the original offer, which can no longer be accepted.

Writing is required only where a statute says so, e.g. the statutory sale and purchase agreements prescribed under the Housing Development (Control and Licensing) Act 1966.

Agency arises by express appointment, implied appointment, ratification, necessity or estoppel.

Agent's duties: obey lawful instructions, act personally, disclose material facts, avoid secret profit, account for money received.

Principal's duties: pay the agreed remuneration and indemnify the agent for authorised acts properly performed.

Ratification requires the principal to have had capacity at the time of the act and to adopt the transaction as a whole.

Agency terminates by revocation, renunciation, or operation of law (death, insanity, bankruptcy, supervening illegality).

The National Land Code 1965 (Act 828) governs land in Peninsular Malaysia; Sabah and Sarawak have their own land legislation.

Torrens principle: title passes on registration, and section 340 confers indefeasible title subject to fraud, misrepresentation, void instruments or registration contrary to law.

Registrable dealings include transfers (Form 14A), charges (Form 16A/16B), leases exceeding three years and easements; all require registration to take effect.

A tenancy not exceeding three years is exempt from registration under section 213(3) (TER), but the tenancy agreement still requires stamping.

Caveats protect unregistered interests: private caveat by a person with a registrable interest, Registrar's caveat, and lien-holder's caveat.

Land category (agriculture, building, industry) plus express conditions and restrictions in interest control permitted use; breach may lead to forfeiture.

Malay Reserved Land cannot be transferred, leased or charged to non-Malays; dealings are restricted to persons defined as Malay.

Adverse possession does not apply to registered land in Peninsular Malaysia.

Strata titles and strata management are governed by the Strata Titles Act 1985 and the Strata Management Act 2013.

Typical sub-sale structure: earnest deposit on booking (about 2-3%), balance to 10% on signing the SPA, and 90% on completion, usually three months later.

For licensed housing developments, Schedule G (landed, 24 months) and Schedule H (high-rise, 36 months) prescribe the statutory SPA terms and completion period.

Transfer of title is effected by Memorandum of Transfer (Form 14A), adjudicated and stamped by LHDN before registration at the land office.

Stamp duty on transfer is ad valorem on the higher of price or market value: 1% on the first RM100,000, 2% on the next RM400,000, 3% on the balance.

Loan agreements attract stamp duty of 0.5% of the loan amount; the charge is registered at the land office.

Stamping deadlines: within 30 days of execution if executed in Malaysia, or within 30 days of first receipt in Malaysia if executed abroad; late stamping attracts penalties.

Real Property Gains Tax scales down with the holding period, with the highest rate (30%) applying to disposals in the first three years.

Under construction, the lender disburses in stages against the architect's or developer's progressive bills.

Comparison method: adjust comparable sales for date of sale, location, size, condition, tenure and facilities to derive value.

Investment method: capital value = net annual income ÷ capitalisation rate; net initial yield = net income ÷ price paid.

Cost method: value = land value + replacement cost of improvements − accrued depreciation (physical, functional, external).

Residual method: gross development value − construction cost − professional fees − finance charges − developer's profit = residual land value.

Market value assumes a willing buyer and willing seller, arm's length, after proper marketing, each acting knowledgeably and without compulsion.

Highest and best use must be legally permissible, physically possible, financially feasible and maximally productive.

Market indicators used in analysis: occupancy and vacancy rates, supply pipeline, absorption rate, price and rental indices, and yield spreads.

Strata Management Act 2013: a JMB operates before strata titles issue, an MC afterwards; separate maintenance and sinking fund accounts are mandatory.

At least 10% of collected maintenance charges must be credited to the sinking fund for major repairs and repainting.

The Strata Management Tribunal hears strata and maintenance disputes and may award up to RM250,000; larger claims go to the courts.

Service charges and sinking fund contributions are apportioned by share units shown in the strata register.

Landlord covenants include quiet enjoyment and delivering premises fit for the agreed use; tenant covenants include paying rent, using the premises for the stated purpose and not subletting without consent.

Tenancy not exceeding three years is exempt from registration under the National Land Code, but the agreement must be stamped on the annual rent.

Recovery of arrears: forfeiture or re-entry clauses, default interest, and claims through the Tribunal or courts; keep deposit records separate from rent.

A listing must rest on written authority from the registered proprietor or a properly authorised representative, stating price, term and commission.

Exclusive listing: commission is payable to the appointed firm even if the owner personally finds the buyer during the exclusivity period.

Open listing: commission is payable only to the firm that is the effective cause of the sale.

Entitlement to commission generally turns on who was the effective cause of the transaction, not who introduced the buyer first.

Advertisements must identify the estate agency firm and the negotiator's REN number, and must not misstate price, size, tenure or condition.

A counter-offer extinguishes the earlier offer; a written offer is not a contract until accepted and consideration is given.

Negotiation planning uses the seller's reservation price, the buyer's maximum, and the zone of possible agreement between them.

Keep dated records of enquiries, viewings and offers for commission disputes and for anti-money-laundering obligations.

Under AMLA 2001, estate agency firms are reporting institutions with duties of customer due diligence, record keeping and reporting to Bank Negara Malaysia.

Customer due diligence: identify the client and beneficial owner, verify identity with reliable independent documents, and understand the purpose of the transaction.

Records of transactions and CDD must be retained for at least six years after the relationship or transaction ends.

Suspicious transaction reports go to Bank Negara Malaysia's Financial Intelligence and Enforcement Department; tipping off the client is itself an offence.

A cash threshold report is required for cash transactions of RM25,000 or more, including linked transactions that appear to be split.

Enhanced due diligence applies to politically exposed persons and higher-risk clients, with ongoing monitoring of the relationship.

Ethical rules bar secret commissions, undisclosed dual representation, misrepresentation of the property, and handling client money outside the firm's client account.

Breaches attract criminal penalties under AMLA and separate disciplinary action by BOVAEP against the firm and the registered negotiator.