Regulatory Framework and the Real Estate Profession in Malaysia
The statute and the Board
The estate agency profession in Peninsular Malaysia is governed by the Valuers, Appraisers, Estate Agents and Property Managers Act 1981 (Act 242), administered by the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP). The Board is a statutory body whose members are appointed by the Minister; it registers practitioners, issues licences, prescribes fees and standards, and disciplines errant members. Act 242 was amended in 2017 to bring property management within its scope, so four callings now sit under one statute: valuers, appraisers, estate agents and property managers.
Three tiers of estate agency
- The firm must hold an estate agency licence, headed by a registered estate agent (REA) as its principal.
- The REA is an individual who has met the Board's academic, examination and experience requirements.
- The REN (Real Estate Negotiator) is registered with the Board and attached to a licensed firm. A REN is registered, not licensed: he negotiates for and through his firm.
Traps candidates fall into
- Believing a REN may trade independently, style himself an estate agent, or run his own agency. He cannot.
- Believing a REN may collect commission, booking or rental deposits personally. All monies and fees flow to and through the licensed firm, which then pays the negotiator.
- Forgetting that advertisements must identify the firm and the negotiator, including the REN number.
- Forgetting that registration is annual and lapses; a lapsed REN who keeps dealing is practising unlawfully.
Rule of thumb
Every piece of marketing you publish should answer three questions: which firm, which negotiator, which REN number?