via https://www.cea.gov.sg/docs/default-source/consumers/no-dual-representation.pdf
No dual representation
If a real estate salesperson tells you that he can represent you in your purchase and
at the same time he is engaged by the seller to sell the flat. Ask yourself, whose
interest will he be safeguarding?
It used to be a prevalent practice in the HDB resale market, with sellers’
salespersons often collecting a commission from the buyer or refusing to sell to a
particular buyer if there is no commission. This practice presents a clear conflict of
interest. The sellers naturally want the highest price for their property and buyers
would want to pay the lowest. The same salesperson cannot possibly discharge his
professional duties to both equally and to represent both their interests fully.
The Council for Estate Agencies (CEA) has prohibited the practice of dual
representation with effect from 15 November 2010. A salesperson cannot be
appointed by both buyer and seller for the same property transaction. He can only
act for one party. The same prohibition also covered the rental transactions. The
ban on dual representation applies to all property transactions, including residential,
commercial and industrial properties.
However, he may help the other party to do paperwork as long as it is clear to all
parties that he is not acting for the other party and has obtained the consent of his
client. Also, he cannot collect a fee from the other party for the paperwork rendered.
If a salesperson collects a fee from the tenant/buyer and also collects part of the fee
from the landlord/seller, it will be a case of dual representation and is an offence
under the Estate Agents Act.
In addition, a salesperson may not collect a commission from his client and collect a
co-broke fee from the other salesperson representing the other party for the same
transaction as there will be a conflict of interest.
So what is co-broking? Co-broking refers to the involvement of two or more
salespersons in the property transaction. The salesperson should promote your
interest and explain and advise you on the co-broking option in the Estate Agency
Agreement to you. Co-broking is advantageous as it widens the exposure of the
property to all salespersons and consumers. With more potential parties who may
be interested, you may be able to get the best deal. The salesperson should not
deny co-broking opportunities to other salespersons because of pre-identified
salesperson/s whom he is only prepared to work with.
Case Study 1 – Salesperson A posted an advertisement of a flat for
sale. A buyer responded to the advertisement and asked A to cobroke with his salesperson. However, A refused to co-broke and
insisted the buyer to engage his partner B as the buyer’s
salesperson. The buyer declined the offer. A second buyer came
along and the flat was sold to him, with B representing the buyer
and A representing the seller. The first buyer was unhappy as he
lost out the deal because he refused to engage B as his
salesperson.
Case Study 2 – A salesperson advertised a property for sale and in
the advertisement, indicated the words “already co-broke” and “1%
commission – buyer”. It was targeted at turning away other
salespersons and potential buyers who did not wish to engage any
salesperson. The salesperson had intended to have the
transaction handled only amongst salespersons in her team, and
have different members of the team collect commissions from the
seller and from the buyer. The salesperson had acted contrary to
the interest of the property owner (seller) and brought disrepute to
the industry.
The salesperson should not deny opportunities to others by adopting unacceptable
practices such as advertising the property with phrases such as “buyers only”, “no
agents”, “already co-broke” or other similar terms which are not in the interest of their
clients.
The salesperson also cannot force someone to engage him and pay him commission
if they are interested in the property. For instance, he cannot deny property viewing
opportunity to a consumer who did not want to engage him. If the consumer is
interested and does not intend to engage a salesperson, he can still try to participate
and cannot be blocked from expressing interest or making an offer for the property.
CEA takes a serious view of salespersons who seek to block other salespersons or
consumers from participating in the property transaction to the detriment of the
client’s interest. CEA will take action against the errant salesperson.
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