The Government is concerned about the growing number of illegal brokers in the real estate industry and plans to step up its efforts to curb the problem.

According to the Board of Valuers, Appraisers and Estate Agents (BVAEA), the Government has been receiving and acting against between 30 and 40 cases a year since 2001. However, it also acknowledges that there are many unreported cases and the actual number of illegal brokers in the market may be much higher.

In encouraging the public to come forward and aid the Government’s efforts, BVAEA registrar R.Mahaletchumi said so far, 19 cases of illegal practisioners have already been exposed this year and the Board is planning to take action by organising a series of raids, with the aid of the police.

“If we receive a tip-off, we will run an extensive background check before we conduct a raid and shut down opertions,” she said, adding that this would be followed by taking legal action against the offender, which could result in a RM25,000 fine, a jail sentence, or both.

Mahaletchumi said over 20 illegal operations have been shut down in the past two years.

Even at State level, steps are being taken to address the issue.

“The Board will soon empower the directors of various State Valuation Departments to set up investigation teams of their own. This will give them the authority to organise and conduct raids in their own States.”

The recent rise in the number of illegal brokers, Mahaletchumi said, could be attributed to the fact that the market today is extremely vibrant and profitable, attracting “everyone from bus drivers to coffee shop owners to want a piece of the action”.

Additionally, she said the aftermath of the 1997 financial crisis and the consolidation of banks channelled many bankers, remisiers and professionals who lost their high paying jobs turning to real estate brokerage as a source of income.

There are also many cases of real estate negotiators who pose as registered agents.

By law, negotiators are only allowed to act on behalf of authorised agents and not engage in dealings themselves. By posing as agents, individuals were collecting the full 2.75 per cent of the sale value.

The law simply states that those who are not registered with the Board and given the authority to practice the real estate profession, by way of being granted a licence (or E number) have no authority to be involved in property dealings and are therefore considered illegal.

“Some illegal brokers have even gone as far as using the license of deceased agents as a means to fool the public about their legitimacy,” Mahaletchumi said.

“There have even been cases where they’ve had the audacity to use the licence number in advertisements published in Chinese newspapers, thinking we would give these publications a miss,” she said.

Currently BVAEA has 1,846 legitimate agents in its register, of which 1,146 are actively practising the profession.

Mahaletchumi said she is confident that with the assistance offered by the police and helpful feedback from members of the public, the problem of illegal brokers can be checked effectively.

Those who wish to make an inquiry, complaint or run a check on an agency can call the Board at 03-2273 7839.