The Malta Independent 1 February 2023, Wednesday
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Unprofessional conduct by certain real estate agents

Sunday, 9 May 2021, 07:15 Last update: about 3 years ago

Nowadays, the work of real estate agents has become much easier thanks to the technology of the internet.  Most of them, if not all, have developed their own websites and uploaded immobile properties for sale complete with photos, description, etc..  They do not have to advertise in the local newspapers anymore as they used to do, and they only wait till the client contacts them either to sell his/her property through them, and or to purchase a property exhibited on their website.  A visit or two accompanied by the client to the property being sold would follow suit but sometimes this is not necessary as long as the related documentation is clear (site plan, plan of the establishment, which is to be sold, proof of ownership by the seller of the property, purchase contract, etc.).


Due to the current government incentives of reducing taxes on sale of properties as a consequence to the prevailing Covid-19 pandemic, sales of immobile properties have boomed, and Real Estate Agents have flourished.  They never had it so good, and their income has increased considerably.  No wonder then that there are so many Real Estate Agents and several branches opening in every town and village in Malta.  Good luck to them. 

But human greed knows no bounds.  As if the hefty Agency fee inclusive of VAT of 6% (or 3.5% for Sole Agency) is not enough, Real Estate Agents are nowadays also claiming a substantial proportion of the deposit which is due to the seller if the purchaser fails to show up for the final deed without giving any valid reason at law.  From time immemorial, such a deposit amounting to 10% of the sale price of the property was considered to be compensation to the seller for (a) having bound his property for a now prolonged period of six to nine months (due to Covid 19 pandemic, bank loans delays, et..) (b) deprived of selling same property even to higher bidders in the meantime, and (c) time wastage (time costs money).  On the other hand, Real Estate Agents should not be entitled to any portion of such deposit because generally it would be their fault for the sale not materializing due to the failure of making a proper due diligence testing of purchaser’s potential to abide by the promise of sale agreement (konvenju) which they are duty bound to do.  In some cases, these Estate Agents are known to entice the prospective purchasers by encouraging them to take a bank loan as if this would solve the limitations of cash payment for the property without considering whether the applicants are capable to pay back the bank loan or not.  Banks are also known to take risks in this sort of deals, and the year 2008 of the so-called Property Bubble is a perfect example.  Perhaps another one is in the offing for Malta.

Most repugnant and deplorable is the deceitful way such irresponsible Real Estate Agents are adapting in tricking the clients by withholding the information pertaining to the engagement of their services.  When asked to provide a copy of the Agency or Sole Agency Agreement most Real Estate Agents avoid this as if this was a state/trade secret.  They will leave the signing of this contract to an occasion when the client is caught unawares i.e. a short while after the signing of a konvenju between the seller and buyer even though their firm would already be stipulated as entitled to the commission in the promise of sale agreement.  This would take place just after leaving the Notary’s Office.  They would then present a one-page paper entitled “Services Fees” and pen to their client, and when the client enquires whether there are any other conditions involved, he/she would be told that this is what the parties (seller and Estate Agency) had agreed upon.  On this one-page document there will be in large letters the details of the seller and buyer of the property, the agency fee applicable, the name of the Agency involved and the date. After the client signs the document and asks for a copy of it as they are entitled to, the Real Estate Agents will excuse themselves by saying that they do not have a copy in hand but will be sending a copy to the client in due course. 

Any professional worth his/her salt knows that whenever an agreement is signed, all parties are to be provided with a copy.  When this copy of Agency Fees agreement is not received by the client, he/she will remind the Agents of their obligation to provide him/her with a copy.  Some time later, when this scanned copy is finally received as an attachment to an email, the client will notice that besides the large lettering of the essential data there will also be small lettering words barely visible to the naked eye (especially in cases where clients are constrained to remove their spectacles whilst wearing Covid-19 face masks to avoid fogging their spectacles) and these will be additional conditions involved which would infringe on the client’s rightful entitlements such as laying claim to a substantial portion of the konvenju’s deposit payment of ten percent of the selling price if purchasers do not honour such agreements unreasonably, of which they would claim from ten and even twenty percent.  This would be a condition of which the client would not have been previously informed. 

The deceptive way by which such agreements are conducted is in clear violation of ACT No. XXXII of 2020 Part IV, Article 12 and it is expected that the Authorities take the necessary steps to punish and avoid such violations.

By the publishing of this “letter to the editor” it is also my hope that prospective clients of certain unscrupulous Real Estate Agents be made aware of the pitfalls involved and resort to other methods of selling their immobile properties (such as advertisement in local newspapers) to avoid the consequences of such unprofessional behaviour.


Raymond Sammut


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