Updates
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Solicitation of Referral Fees or Commission by Registered Estate Agents
25-04-2024Dear Members,
By way of a letter dated 15.01.2024, the Advocates Association of Sarawak ("AAS") had written to the Branch Chairman of the Malaysia Institute of Estate Agents (MIEA) Sarawak on the issue of " Solicitation of Referral Fees or Commission by Registered Estate Agents".
A PDF of the said letter is attached for you perusal. The said letter was also copies to MIEA Headquarters.
By way of reply dated 29th January 2024 from MIEA Sarawak, Sr. Robert Ting Kang Sung who is the Branch Chairman of MIEA Sarawak informed AAS as follows:
- That the subject matter of "Solicitation of Referral Fees or Commission by Registered Estate Agents" be forwarded to the Board of Values, Appraisers, Estate Agents and Property Managers ("BOVAEPM").
- That the Malaysian Bar had brought up the matter to BOVAEPM informed that a circular will be issued on the subject matter.
A PDF Copy of the said reply is attached for your perusal. The said reply was also copied to MIEA Headquarters.
Before we could write in to BOVAEPM to pursue the matter as advised by MIEA Sarawak, we were informed that BOVAEPM had issued notifications to Registered Estate Agents. A copy each of the Notification is enclosed as follows:
- Notification 3/2024: Preparation of Tenancy Agreement
- Notification 4/2024: Prohibition against demanding or obtaining referral fees from solicitors
- Notification 5/2024: The Right of the Legal Representatives of Client's Choice
On 18th April 2024, it had been reported in the media that MACC had arrested two bankers in West Malaysia for allegedly soliciting bribes from several law firm as inducements for referring property buyers to these law firms for documentation purposes in application for loans.
The link to the media report is at: https://www.thestar.com.my/news/nation/2024/04/18/macc-arrests-two-bank-officers-for-bribing-several-law-firms
We have also received numerous oral complaints from Members that some legal firms in Sarawak are paying referrals fees to bankers and property agents to solicit referrals of cases. Advocates who are a party to such a referral fees scheme may also be changed. Members with supporting information or supporting evidence may refer the matter to the Sarawak Inquiry Committee by way of a formal complaints lodged through the Secretary of the Sarawak Inquiry Committee.
We would like to highlight the following Rules under the Advocates (Practice & Etiquette) Rules, 1998:
- Rule 31 which states "Every Advocate shall at all times uphold the dignity and high standing of his profession".
- Rule 51 which states" An Advocates shall not do so or cause or allow to be done, anything for the purpose of touting directly or indirectly or which is calculated to suggest that it is done for that purpose.
- Rule 52 which states "It us unprofessional and improper conduct (a) for an Advocate to divide or agree to divide either costs received or the profits of his business with any unqualified person; (b) for an Advocate to pay, give, agree to pay or agree to procure or influence or for having procured or influenced any legal business and whether such payment, gift or agreement be made under pretext of services rendered or otherwise, but this rule does not prohibit payment of ordinary bonuses to staff; (c) for an advocate to accept or agree to accept less than the scale fees laid down by law in respect of non-contentious business carried out by him"
- Rule 61 which states "An Advocate shall not permit himself to be controlled or exploited by any lay agency intervening between client and himself".
If anyone is aware of or has reason to believe that touting activities are being carried out, a report should be lodged immediately with the Secretary of the Sarawak Inquiry Committee through the proper forms and emailed to the Secretary of the Sarawak Inquiry Committee through inquirycommitteeswk@gmail.com.
The appropriate forms to lodge the complaint to the Secretary of Sarawak Inquiry Committee are attached for your attention.
Thank you & Regards,
Gurvir Singh Sandhu
President
The Advocates Association of Sarawak
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