As a salesperson, you are clear on the responsibilities of your clients – be they sellers or landlords – as you advise them on their property transactions. But what if you are the seller/landlord of your property in the transaction? What are some things you need to note?
Para 1.4.1 in the Professional Service Manual states that,
“If a salesperson transacts a property for himself, i.e. the salesperson is a party to the property transaction, the salesperson shall as soon as possible disclose upfront that he is an interested party in the transaction and must not accept an appointment by or act on behalf of the other party to the transaction. In such a scenario, the salesperson can only represent himself and cannot collect a commission or co-broke commission from the other party or the other party’s salesperson”.
1. You have to make an upfront and clear declaration to your prospective buyer/tenant that you are the owner of the property.
An upfront declaration involves it being done as early as possible to the prospective buyer/tenant, e.g. before or at the beginning of the first viewing of the property. A common misconception is that salespersons are only required to make said declaration if the deal is confirmed, e.g. just before the signing of the tenancy agreement or option to purchase, and that there is no need to declare to prospective property viewers who have not committed to buying/renting the property.
The declaration has to be clear and not implied. For example, you should not make the assumption that the prospective buyer/tenant is aware that you are the owner, nor should you let them deduce your ownership of the property by having many photographs of yourself placed in the property for them to see; such actions are not declarations. The declaration should preferably be in a written form.
The requirement to make such a declaration applies even if there are multiple owners for the property and the salesperson is one of them.
2. As the owner and salesperson representing yourself in the transaction, you should not represent the buyer/tenant, nor collect any commission or co-broke commission from them or their salesperson.
Due to the conflict of interest, salespersons should only represent themselves. Otherwise, the salesperson could potentially be in breach of the Code of Ethics & Professional Client Care (CEPCC). For example, by placing themselves in a position of conflict of interest or potential conflict of interest with their client, whereby the conflict arose from the salesperson’s own interest to secure certain preferred terms that might not align with the client’s interests, where the salesperson has failed to declare as soon as possible, their interest in the transaction (a breach of paragraph 13(1) read with paragraph 13(2) of the CEPCC).
Keep these points in mind if you are representing yourself in a sale or rental transaction, to minimise misunderstandings and ensure a more transparent process between you and the other party.
Information accurate as at 28 January 2022