5.3 Standards 7 & 8: Co-Agency Practice & Viewings

5.3 Standards 7 & 8: Co-Agency Practice & Viewings

These two standards deal with the day-to-day mechanics of closing deals: how firms cooperate with each other, and how agents must conduct themselves when physically showing a property. Both are heavily tested because they describe situations every REN encounters within weeks of starting work.

Standard 7: Co-Agency Practice

Co-agency is an arrangement where two registered firms cooperate to complete a transaction. The listing agent (or listing firm) is the firm that holds the signed engagement from the seller or landlord — it controls the listing. The co-agent, also called the introducing or cooperating agent, is a second firm that brings the buyer or tenant to the table.

Fee Splitting

The commission is shared between the two firms. Standard 7 expects the fee-split formula to be agreed in writing before the cooperation begins — for example, 60/40 in favour of the listing firm, or 50/50. Where nothing is agreed in writing, the default position is an equal 50/50 split between the listing and introducing firms. Note that the split is between the firms, not between individual negotiators; each REN is then paid by his own firm under his internal arrangement.

Worked example: A double-storey house in Johor Bahru sells for RM500,000. The Seventh Schedule maximum fee is 3%, so the total fee is RM15,000, payable by the seller to the listing firm. Under a 50/50 co-agency split, the listing firm retains RM7,500 and pays RM7,500 to the introducing firm that brought the buyer.

Rules of Engagement Between Firms

• Respect the listing firm's engagement terms. The co-agent must honour the conditions of the listing firm's appointment — including the asking price basis and the agreed fee — and must not undermine them.
• Channel everything through the listing agent. The co-agent must route all offers, counter-offers and negotiations through the listing agent and must not bypass the listing firm to contact the seller or landlord directly, unless authorized in writing. Bypassing ("lompatan" or jumping the agent) destroys trust in the co-agency system and is a classic exam answer for prohibited conduct.
• No onward passing without consent. A co-agent who receives co-agency details of a listing must not pass the listing to a third firm without the listing firm's consent. The listing remains under the listing firm's control at all times.
• Every co-agency agreement needs an expiry date, decided by the listing agent (7.2.2); it ends on that date, on expiry of the listing, or by mutual agreement. During the co-agency period the co-agent must not solicit the same agency appointment from the client (7.2.3).
• The co-agent must not advertise or signboard the property, or contact the vendor or landlord directly, unless the listing firm agrees (7.3.2.3–7.3.2.5).
• Disclose your prospect. If the listing firm has already shown the property to the prospect's spouse, employee, proxy, nominee or representative, the co-agent earns no fee unless it disclosed that person's identity to the listing firm in the first instance (7.3.2.6).

The abort split

Standard 7.2.6 supplies a second 50:50 rule that candidates confuse with the fee split. Where a transaction is aborted, the abortive fee or forfeited amount is divided 50% to the client, 25% to the listing agent and 25% to the co-agent. So on a forfeited RM20,000 deposit the client keeps RM10,000 and each firm receives RM5,000. Any variation from the standard 50:50 fee sharing must itself be agreed in writing between the listing agent and the co-agent.

• Multiple Listing Services (MLS). An MLS is a formal platform — such as the schemes run by the Malaysian Institute of Estate Agents (MIEA) — through which member firms share listings under standardized co-agency rules. MLS participation systematizes the written fee-split and routing obligations described above.

Standard 8: Viewings and Inspections

Before and During the Viewing

• Viewer acknowledgment form. Viewers should sign a viewer acknowledgment form (sometimes called a viewing confirmation) recording their name, the property, and the date. This is not bureaucratic decoration: it is the firm's evidence that it introduced that particular viewer — critical if a fee dispute arises over who was the effective cause of the transaction.
• Accompany viewers. Standard 8.2.5 encourages the listing agent to be present at all viewings, including co-agency viewings, and 8.2.6 requires that in co-agency the viewings and documentation are at all times within the listing agent's knowledge and overall supervision. In practice firms treat accompaniment as a rule: keys are never lent to strangers, and viewers are never left to wander an occupied home unsupervised.
• Property knowledge duty. The agent must know the property: tenure (freehold or leasehold, and the unexpired lease term), built-up and land area, maintenance charges and sinking fund for strata units, known defects, and the owner's asking price and expectations. A REN who cannot answer basic questions damages the client he represents.
• No written opinions of value. Under Standard 8.2.8, an estate agent who is not a registered valuer must not communicate an opinion of value in writing to anyone, because it may be construed as a formal valuation under the Act. A negotiator may discuss comparable transacted prices; putting "this unit is worth RM720,000" in a WhatsApp message crosses the line. Standard 8.2.3 separately bars any factually unsupported statement about the property.
• Honest information. Agents must furnish accurate information, including the probable length of the transaction — for example, that a sub-sale with an existing loan and individual title typically takes three to four months to complete, longer if the title is still with the developer or subject to consent. Viewers must not be given unrealistically rosy timelines to push them into an offer.

Keys and Security

Keys collected from an owner must be logged, tagged and stored securely; access is only with the owner's consent; and keys are returned promptly when the engagement ends. A lost key or an unauthorized entry exposes the firm to liability and the REN to disciplinary action.

Unrepresented Parties

A frequent situation: the buyer at a viewing has no agent of his own. The listing agent acts for the seller, and Standard 8 requires the agent not to mislead that unrepresented buyer into believing the agent is protecting the buyer's interests. The agent may deal fairly and honestly with the buyer, but must not pretend to be neutral or double-sided. Charging both sides — the so-called double commission — is prohibited outright, and consent does not cure it: Rule 89(2) of the 1986 Rules says a registered estate agent "shall not charge or attempt to charge fees on more than one party in any one transaction", and Rule 89(3) allows the firm to charge and accept fees only from the person who appointed it.

Exam Pointers

• Fee split: written agreement first (7.2.1), default 50:50 (7.2.5). On an abort, the split is 50% client / 25% listing agent / 25% co-agent (7.2.6).
• Communications and offers go through the listing agent; no bypassing, no passing listings to third firms without consent.
• Viewings: accompanied, recorded on a viewer acknowledgment form, with honest information including probable transaction length.
• Keys: logged, secured, owner's consent only.