Property Talk

With several of our intern estate agents diligently studying for their Estate Agents Affairs Board prescribed qualification exams the spotlight has fallen on the Estate Agents Code of Conduct and how this document is fundamental to the behaviour of Estate Agents when engaging with the public. There are several aspects of the Code of Conduct that many people may not be aware of and it is instructive to focus on a few of those.

The first aspect of the code deals with the estate agent's duty to protect the public's interest. Estate agents are specifically required not to do anything that may be contrary to the integrity of estate agents in general. They are required to specifically protect the interests of their client first and foremost. The "client" is the person who has provided the estate agent with the mandate to represent the property and in most instances is therefore the seller. Although prospective purchasers shopping around with estate agents are loosely referred to as "clients", they are not the primary client of the estate agent. There is a provision in the Code of Conduct for estate agents to at all times, to the best of their ability, to also protect the interests of all the other parties to a property transaction, which would typically be the buyer. Is it possible for an estate agent to represent the seller and buyer equally This is not necessarily an easy question to answer and in other places such as the US market, it almost never happens that an estate agent represents both the seller and buyer in a property transaction. There they have a clear distinction between the listing or seller's agent and the buyer's agent. The transaction is then often negotiated between the two agents who are referring to their clients. In the US they would therefore respond to that question by saying that it is not possible for one estate agent to equally represent both seller and buyer.

One of the aspects of the code of conduct is the requirement on an estate agent not to deny equal service based on a person's race, creed, sex or country of national origin. If a seller would prescribe to an estate agent that only certain types or profiles of potential buyers or tenants are to be considered, based on race, creed, sex or country of national origin, then the estate agent would find themselves in conflict with the Code of Conduct. They would therefore be forced not to represent that property owner. It is a very serious thing for an estate agent to find themselves in breach of the Code of Conduct as the sanction could be the withdrawal of their Fidelity Fund Certificate, without which they are unable to trade. This is the big stick the EAAB wields over the industry.

Another interesting aspect is that no estate agent can represent a property without a mandate. A sole mandate has to be reduced to writing and has to be time bounded. There can be no provision in an agreement of sale to refer a sole mandate onto an estate agent for the future sale of the property by the new owner.

Another important aspect of the Code of Conduct is that an estate agent is obliged to present all offers received to the seller, unless specifically instructed by either party not to. Seller's should therefore not become offended by low offers when presented by their appointed agent, who is simply doing their job.