If you’re a real estate agent based in Malaysia, it’s your legal obligation to understand and adhere to The Board of Valuers, Appraisers, Estate Agents, and Property Managers (BOVAEA) guidelines. These guidelines also help you maintain trust with your clients and work in a transparent market.
So what are these guidelines and what are the conditions you must follow as a realtor in Malaysia?
In this article, we’ll explain everything you need to know about the BOVAEA guidelines and their implications for your professional practice.
Understanding BOVAEA
The Board of Valuers, Appraisers, Estate Agents, and Property Managers (commonly known as BOVAEA) oversees the practices of real estate professionals as the official regulatory body in Malaysia. It was established under the Valuers, Appraisers, Estate Agents, and Property Managers Act 1981 (Act 242), and was created to maintain a high standard of professionalism and ethics in the industry.
There have been continuous updates to BOVAEA guidelines and standards over the years. Currently, BOVAEA guidelines mainly focus on continuing professional development (CPD), ethical compliance, and annual licence renewal.
Let’s discuss the major elements of BOVAEA guidelines you should know about:
Code of conduct and ethics
The BOVAEA professional code of conduct and ethics is designed to maintain the integrity of the real estate industry and trust between agents and real estate customers. It encourages honesty, transparency, and accountability in all real estate transactions. As a registered real estate agent, you are expected to uphold these values and ensure your actions reflect the best interests of your customers.
Here are key ethical guidelines you’re expected to follow:
- Fidelity: As a real estate agent, you must be loyal to your clients and prioritise their interests above your own. This includes providing accurate information, offering practical advice, and avoiding conflicts of interest.
- Integrity: You must conduct with honesty, avoid deceptive practices, and ensure all your transactions are transparent.
- Fairness: It’s essential to deal with clients, other agents, and the public fairly. You must avoid discrimination and treat all parties in a transaction with respect at all times.
Breaching the code of conduct can result in disciplinary action, which may include fines, suspension, or revocation of your REA licence. Severe cases of misconduct, such as fraud or gross negligence, could lead to legal action.
Roles and responsibilities of real estate professionals
As a registered real estate agent (REA), you are responsible for assisting clients in buying, selling, or renting properties. While dealing with your clients you’re required to provide market insights, conduct property valuations, negotiate deals, and ensure all legal requirements are met. Furthermore, you must ensure all transactions are conducted ethically and in the best interest of your clients to adhere to BOVAEA guidelines.
There are different types of real estate professionals in the Malaysian real estate market. Responsibility of each profession may vary depending on their licence. Here’s a brief overview of difference in roles and responsibilities between Real Estate Agents (REAs), Real Estate Negotiators (RENs), and Property Managers:
- Real Estate Agents (REAs): A real estate agent is a licensed professional who can independently manage real estate transactions. They have completed the necessary education, training, and examinations to be fully registered with BOVAEA.
- Real Estate Negotiators (RENs): A real estate negotiator works under the supervision of real estate agents or a registered real estate firm. While they can assist in property transactions, they are not fully licensed to independently manage real estate deals. A real estate negotiator must operate under a real estate agent or a real estate agency.
- Property Managers: Property managers manage properties on behalf of owners. Their duties include overseeing maintenance, managing tenants, and ensuring the property remains in good condition.
By adhering to BOVAEA standards, you maintain the integrity of your profession and ensure client trust. You are required to follow these guidelines in your regular operations, from initial client consultations to closing transactions. This way, you don’t just protect your clients but also contribute to a fair and transparent real estate market.
Compliance and legal obligations
Act 242, the Valuers, Appraisers, Estate Agents, and Property Managers Act, outlines the legal framework within real estate professionals must follow. This includes requirements for registration, adherence to professional conduct, and compliance with industry regulations. You must also be familiar with related laws, such as tenancy agreements and land titles.
Record-keeping
You should maintain accurate records of all your real estate transactions, including contracts, correspondence, financial records, and any other documentation that reflects your professional activities. Proper record-keeping is not just essential for transparency, it can also play a crucial role in resolving disputes or complying with regulatory audits.
Handling disputes in compliance with BOVAEA guidelines
There is a BOVAEA framework for resolving disputes and grievances with your clients and other parties. You must follow these procedures to ensure timely resolution of issues. This may involve mediation, arbitration, or formal disciplinary action by BOVAEA.
Professional indemnity insurance
According to BOVAEA guidelines, all registered real estate agents must have professional indemnity insurance. This insurance covers claims made against you for professional negligence or errors that result in financial loss to clients.
Here’s a brief overview of the types of recommended insurance coverages:
- Professional indemnity insurance is the primary insurance required by BOVAEA. It covers claims related to professional negligence.
- Public liability insurance provides coverage against claims made by third parties for injuries or property damage occurred during your business activities.
- Cyber liability insurance protects against risks related to data breaches, cyber-attacks, and other digital threats.
Professional indemnity insurance provides you with financial protection in the event of a claim, covering legal fees, and settlements. This safeguards your personal and business assets while ensuring clients are compensated for legitimate claims.
Continuing professional development (CPD)
CPD ensures you stay updated with industry trends, laws, and best practices, so your skills and knowledge remain relevant.
As a real estate agent, you’re required to participate in CPD activities to maintain your REA licence. Keep in mind that CPD is not just a regulation but also an essential framework for career advancement as it helps you stay informed of new regulations, market trends, and technological advancements.
CPD activities and how to earn CPD points
CPD commitment includes attending workshops, seminars, conferences, and training courses. You can also earn CPD points through self-study, online courses, and participating in industry events. There are BOVAEA guidelines on the number of CPD points an agent needs to acquire annually. You must track and report your CPD activities.
Numerous resources, including industry associations, educational institutions, and online platforms are available to help you pursue CPD. BOVAEA and the Malaysian Institute of Estate Agents (MIEA) regularly offer CPD programs according to the needs of real estate professionals. You can also seek out specialised courses in areas such as property management, valuation, and legal compliance to further enhance your expertise.
If you want to know more about, this guide explains everything you need to know about CPD courses for Malaysia real estate professionals
Practical tips for compliance with BOVAEA guidelines
BOVAEA guidelines may seem overwhelming at first, but they can become a regular part of your real estate practice if you understand them well. Familiarise yourself with the guidelines and integrate them into your professional routine. Here are some practical tips:
- Stay informed: Reviewing updates and circulars from BOVAEA keeps you up-to-date with the changes in regulations and guidelines. Consider subscribing to newsletters or following official channels on social media to receive timely updates.
- Maintain accurate records: Keep all your transaction records, contracts, correspondence, and financial documents organised and secure. Apart from aiding in compliance, this also helps you in case of audits or disputes.
- Understand and adhere to ethical guidelines: Familiarise yourself with BOVAEA’s code of conduct and integrate these ethical practices into your daily operations. Honesty, transparency, and fairness in all dealings is important.
- Complete CPD requirements: Always keep track of your CPD activities and meet the required CPD points annually. You can also use CPD as a tool to broaden your knowledge and skills, so don’t hesitate to engage in a variety of CPD activities.
- Verify registration: Regularly verify your registration status on the BOVAEA website to ensure you’re in good standing and legally compliant to practice.
- Use professional indemnity insurance: Cover your professional activities with professional indemnity insurance to protect against potential liabilities. Always ensure your coverage is up to date and sufficient to cover the risks associated with your practice.
- Follow legal procedures: All your transactions should be conducted in compliance with Malaysian property laws. Follow legal procedures during documentation to minimise the risk of legal disputes and ensure smooth transactions.
- Audit regularly: Conduct internal audits periodically to review your compliance with BOVAEA regulations. This proactive approach can help you identify and correct any issues before they escalate.
- Seek professional advice: Always seek advice from legal professionals or consultants specialising real estate law and BOVAEA compliance if you’re in doubt. It’s the best way to navigate complex situations and avoid potential pitfalls.
We hope the article helped you understand what you need to know about BOVAEA guidelines.
