Real estate laws in the works

The local real estate industry is finally getting its act together with legislation aimed at protecting the consumer and weeding out unscrupulous agents. The Real Estate Brokers Bill —  the work of the Association of Real Estate Agents and a contingent of lawyers — is expected to go before the Attorney General for revamping before it is presented in Parliament as a draft Bill to be passed. The core of the Bill will be a Code of Ethics for brokers designed to act as a safeguard for clients against unscrupulous agents, who are plaguing the market and giving it a bad name. “The legislation will be the basis on which the entire real estate industry is run,” said Patricia Lazzari, President of the Association of Real Estate Agents (AREA). According to Section II Part 3 of the Draft Bill, the main purpose of the act is to provide for the protection of the public against unethical and dishonest dealings by persons engaged in the real estate business.

“We are gearing more towards consumer protection,” Lazzari said, “because we have found a lot of real estate agents who will take their commission out of a deposit for one reason or the other.” “This means that if the deposit has to be refunded, the agent is no where to be found, the commission is gone and it is the buyer to catch because it is his money.” She explained that the Code of Ethics outlined in the Draft Legislation was modelled after that of the Association which has been in existence for the past 15 years. The rules contained in the Code, which is set out in the Second Schedule of the Bill, aim to regulate the conduct and discipline of registered real estate brokers and salespersons. Lazzari said the legislation will protect the buyer, seller and the agent. Outlining the basis for professional relations between an agent and his customers, the Code of Ethics states that it is the duty of every real estate broker to protect the public against fraud, misrepresentation or unethical practices in connection with real estate transactions.

“Property should be offered by a real estate broker solely on its merit without exaggeration, concealment, or any form of deception of misleading representation,” it continued, adding that it was the broker’s duty to never offer a property without the authorisation of the owner. A breach of the Code of Ethics constitutes misconduct. One of the major problems facing the industry at present, Lazzari explained, stemmed from the presence of a number of unregistered agents who were operating without any relevant training or documentation. “If you look in the newspapers on any given day, there are hundreds of real estate agents listed, some of whom you have never even heard about. You may see a name this week and the next week it has disappeared.” “Real estate is something you can do out of your house. A lot of agents work independently and it is not that we want to stop that, but we want to bring a little more professionalism into the industry.”

She estimated that there were at least 100 or more independent real estate agents operating on the market at present who were not registered members of AREA. The Association currently has a membership of 50 agencies. One independent agent praised the bill, stating that it was high time that such legislation was implemented. He agreed that it would serve to enhance the professionalism of agents who will have to work within the framework of a Code of Ethics, but maintained that it would allow for the protection of the client. “A Code of Ethics will make the agents duty bound to perform,” he said. Lazzari agreed, saying, “We want real estate agents to be looked at with a certain amount of respect but there are a lot of agents, who like in any other business, are crooks and we want to weed out the good from the bad.”

This new Bill will now mean that all prospective agents will have to complete a series of courses and examinations, which are offered once a year by ROYTEC, before being allowed to register as an agent. The legislation states that an apprentice must be licensed to a real estate broker for one year and obtain from the Council a certificate that he or she has successfully completed the apprenticeship programme. “This will get rid of a lot of agents who are not prepared,” Lazzari maintained, stressing that the Association was not looking to drive away the small, independent brokers. She said, “They are necessary to the industry because there are some people who do not want to deal with big companies, they want to do business with a one man show and that’s fine. “But once you are doing it in a professional manner and you are following the rules we have no problem with that.”