Being a property agent or real estate negotiator in Malaysia is hard, but with hard work and a willingness to learn, success in the field of real estate isn’t impossible. Honesty, responsibility, credibility, and empathy are just some of the key qualities of a good real estate agent. Nevertheless, despite all that, there are still some legal pitfalls that you may encounter in your work as an agent or negotiator. Thanks to property expert and legal advisor Sophia Ling, we find out what these pitfalls entail, and how to avoid them.

Misinterpretation

As a real estate agent or negotiator, it is important to always be truthful and leave no room for others to misinterpret your meaning or intentions. This not only increases your credibility, but also builds trust between you and your clients. An example given is that when an agent wants to sell off a property quickly, they might miss out certain aspects of the property that the buyer did not think or ask about. Hence the buyer might make their own assumption about the matter. Therefore, it is your responsibility as a real estate agent/negotiator to always check with a lawyer on any unclear terms, clauses or issue.

Negligence & Breach of Contract

These two are the most common lawsuits brought against a real estate agent. In law, negligence is defined as breach of a duty of care which results in damage. Agents owe their clients a duty of care as their clients trust them for their expertise in the real estate process. As an agent, they must always act in the best interest of their client and should have a high standard of honesty. While unfortunate, it is not uncommon to find that real estate agents and negotiators may fail to recommend property inspections to prospective buyers. Your clients trust you for your expertise and guidance through the real estate process, but always remember that there are some areas that require a third-party opinion, such as stamp duty, income tax, legal issues, and more. So, never attempt to hide any information and never exaggerate to induce potential buyer to buy the property.

Breach of Duty

This is also known as breach of fiduciary duties. When a breach of fiduciary duties by a real estate agent is involved, the client can ask the courts to rescind the contract and restore them to their status before entering the agreement. This could involve the return of the property to the seller and refund of the buyer’s money. There does not need to be something unfair about the transaction itself, only the breach of fiduciary duties by the agent. Real estate agents are hired by clients to act in the clients’ best interests, not their own best interests. They are held to a high standard of honesty and full disclosure. When a real estate agent decides to act for their own personal benefit to the detriment of their client, they have breached the fiduciary duty that they owed to their client.

Sophia Ling is the Managing Partner of Leong & Co (Advocates and Solicitors) (KLCC branch). She has many years of experience in handling legal matters involving conveyancing matters e.g. housing loans, sales and purchase agreements, tenancy agreements, and developer project agreements, among others.