Property technology (PropTech) companies should heed warning from the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVEAP) to come down hard on them if they are found to offer agency services without proper registration with the board.
Malaysian Institute of Professional Estate Agents and Consultants (MIPEAC) president Francis S.P. Loh advised PropTech firms to follow the existing legislations.
“This is in light of the recent spate of grumblings of illegal brokering by some PropTech startups and lack of enforcement. Of late, with the advent of so many PropTech startups and illegal real estate services operators in Malaysia and so many more, it is imperative that any PropTech firm which wants to operate must be registered with BOVEAP,” he said.
BOVEAP was established under the Finance Ministry to govern and regulate property practitioners to ensure the public are protected when buying, selling, and renting properties.
Loh said registering with BOVEAP would not only ensure a level-playing field for existing practitioners, all of whom are required to comply with strict conduct and licensing requirements, but is also an efficient integration into the local industry.
“The public needs to know more about the problems a buyer and seller may face in an infrequent transaction that involves huge sum of money, unlike buying books or food. The consumers need to be sure that they are not investing into or seed-funding any illegal enterprise.”
Consumers using the services of unregistered brokers are at risk of losing their money. The consequences are dire, said Loh.
“If the amount of money involved is big enough, you may find it difficult to financially recover from the ordeal.”
He said while PropTech firms may tout their services to the public with attractive perks and incentives, MIPEAC advises consumers they may not have any recourse to monies held by such firms in the event of a dispute.
“Any PropTech firm that purports to offer agency services without proper registration with BOVEAP infringes the law,” he said.
Loh said recent legislative amendments to Act 242 (Part VIII, Section 30) state that any person who acts as an estate agent whether the primary or principal object of his business is estate agency or impersonates a registered estate agent is regarded as committing an offence and is liable on conviction to a fine not exceeding RM300,000 or to imprisonment for a term not exceeding three years or both.
If you imply you are a property agent by referring to yourself as an “estate agent”, “house agent”, “property agent”, “land agent”, “house broker” or similar, or share any marketing materials that imply you are a property agent — you would have committed an offence, he said.