The Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP) is tracking over 100,000 unlicensed real estate agents operating in Malaysia.
This was prompted by the recent joint raid conducted by the BOVAEP and the police on a real estate cooperative firm which carries out an illegal estate agency practice, a timely move according to Malaysian Institute of Professional Estate Agents and Consultants (MIPEAC) president Francis SP Loh.
“More than 50 real estate frauds are being reported every month as a result of illegal real estate brokers operating in the country,” said Loh, who also expressed his dismay on the rise of the number of illegal and unregistered real estate brokers in Malaysia, despite the existence of strict laws governing agency on buying, selling, and renting of real estate, as reported by The New Straits Times (NST).
The issues on illegal real estate brokers worsened due to unregistered firms or persons acting as agents who sell Malaysian properties for a fee, which include property marketing firms, proptech companies, travel agencies, investor funds, MM2H companies, and even foreigners, too, explained Loh.
Foreign real estate agents or developers are not allowed to sell properties on their own in Malaysia and are required to engage local registered real estate agents or firms to promote foreign properties.
Cases of foreign agents from countries like Singapore, Japan, and Hong Kong advertising Malaysian properties for sale locally and abroad, as well as foreign developers transacting properties with Malaysians without BOVAEP approval, have already been reported.
“Not only are these illegal and unregistered real estate agents and negotiators profiteering through various fraudulent activities, but they are also jeopardising the professionalism and accountability of the real estate industry,” he said.
Aside from this, by transacting with unlicensed agents, buyers also risk losing their money.
At present, estate agency practices in Malaysia are governed by the Valuers, Appraisers, Estate Agents and Property Managers Act 1981 (Act 242) which mandates that real estate agents must be registered and real estate negotiators must be certified by BOVAEP.
Recent legislative amendments to Act 242 (Part VIII, Section 30) provides that any person acting as an estate agent, whether the primary or principal object of his business is estate agency or impersonates a registered estate agent, is committing an offence.
The punishment for such is a conviction to a fine not exceeding RM300,000, or imprisonment for a term, not more than 3 years, or both. A further penalty of RM1,000 for each day during the continuance of such offence shall also be imposed.
This provision also applies to any person who aids and abets in the commission of the offence.
“MIPEAC urges the public to come forward and lodge reports with BOVAEP and the police on any activities undertaken by illegal real estate brokers to effectively curb the problem,” concluded Loh.