THE CODE OF CONDUCT OF ESTATE AGENCY PRACTICE IN LAGOS STATE

The Special Adviser to the Governor on Housing, Hon. Jimoh Ajao at the workshop of the Lagos State Real Estate Transaction Department (LASRETRAD) held in 2013. Pix: Olumide T. Agunbiade

RULES AND REGULATORY CODE OF CONDUCT THAT PROTECT THE PRACTICE OF ESTATE AGENCY IN LAGOS STATE

1.      RULES AND REGULATIONS ON REAL ESTATE TRANSACTION

                                                                                                   Source: LASRETRAD

        I.            A registered agent transacting business in Lagos State shall have ascertained operational business premises or office within the state.

     II.            A registered agent shall maintain a record of his or her business transactions and shall open a separate bank account for that purpose.

   III.            A registered agent shall ensure that a prospective tenant or purchaser takes physical possession of the property paid for within fourteen (14) days except otherwise stated in writing.

  IV.            A registered agent shall ensure that his principal performs all necessary obligations due to the government under applicable legislation and regulation

2.   STANDARDS OF PROFESSIONAL COMPETENCE

        I.            A registered agent must exercise all skill, care, competence and diligence at all times when carrying out agency work.

     II.            A registered agent is presumed to be conversant with laws and regulations relevant to the agency work.

3. STANDARDS OF PROFESSIONAL CONDUCT

        I.      A registered agent must comply with the fiduciary obligations to his or her client arising as a registered agent.

     II.      A registered agent must act in good faith and deal fairly with all parties engaged in a transaction.

   III.      A registered agent must not engage in any conduct likely to bring the industry into disrepute.

  IV.      A registered agent must not mislead a customer or client, nor provide false information, or withhold information that by law or fairness be provided to a principal/prospect.

     V.      A registered agent is required to discover hidden or underlying defects in property and must disclose known defects to the principal.

a.)    Obtain confirmation from the principal that the property in question is not subject to any defect or litigation.

b.)    Ensure that the principal is informed of any significant potential risk so that the principal can seek expert advice if he/she chooses.

  VI.      A registered agent must not continue to act for a principal who directs that information referred to in rule 3.V a & b be withheld.

        4. DUTY TO REPORT MISCONDUCT OR UNSATISFACTORY BEHAVIOUR

I.     A registered agent who has reasonable grounds to suspect that another agent has been guilty of                 unsatisfactory conduct may make a report to LASRETRAD office.

II.    A registered agent who has reasonable grounds to suspect that another agent is guilty of misconduct must make a report to LASRETRAD office.

For example, a house built within a particular period of time and of particular materials that are not good or that may be at risk of weather elements, or without good sanitary provisions. The registered agent could reasonably be expected to know of this risk (whether or not selling/letting directly and disclose such problem). While a customer is expected to inquire into the risks regarding a property and undertake the necessary inspections and seek advice, the agents and the customer must not simply rely on CAVEAT EMPTOR or ‘THIS HOUSE IS NOT FOR SALE, BEWARE OF 419’, that is now becoming a norm. This example is provided by the way of guide only and does not limit the range of issues to be taken into account under rule 3.IV.

III.         A registered agent must not use or threaten to use the complaints or disciplinary process for an   

     improper purpose and must be aware of comparable information on sales of properties/letting in 

     similar location or business.

IV.         An advertised price must clearly reflect the pricing expectations agreed with the principal and likely

     value of property from an Estate Surveyor and Valuer.

  V.         A registered agent must not mislead customers as to the price expectations of the principal.

5.        AGENCY AGREEMENTS AND CONTRACTUAL DOCUMENTS

I.        When inviting signature of any agency agreement, a registered agent must explain to a prospective principal (in writing) the necessary obligations.

a.        The conditions under which commission must be paid and how commission is calculated, including an estimated cost (actual Naira amount) of commission payable by the principal, based on the appraised price of the property or business. The agreed professional/agency fees must be clearly stated.

b.        How the property or business will be marketed and advertised, including any additional expenses that such advertising and marketing will incur must be explained.

II.       When inviting signature for an agency agreement or lease/letting and purchase agreement, or other contractual document, a registered agent must ensure that a prospective principal is aware that he or she can, and may need to seek legal/technical, or other advice and information, and allow the prospective principal a reasonable opportunity to do so.

III.      A registered agent must not submit an agency agreement or a lease/letting agreement or other contractual to any person for signature unless all material particulars have been inserted into or attached to the document.

6.        DUTIES AND OBLIGATIONS ON AGENTS TO CREATE AWARENESS OF LAW, REGULATIONS AND RULES.

I.        A registered agent who is operating as a business must display these rules and regulations (LASRETRAD code of professional ethics) prominently in the public area of each office of branch, and provide access to it on every website maintained by the agent for the purposes of the business.

II.       A registered agent must make these rules available to any person on request.

III.      A registered agent who is operating a business concern must ensure that agents engaged or employed are familiar with the applicable law and other legislation relevant to real estate agency work, associated legislations, and any rules made by the office and will be held vicariously liable for the sub-agents conduct.

7.        CLIENTS CARE AND DEALINGS WITH CUSTOMERS

I.        A registered agent must act in the best interest of his principal and act in the accordance with the principal’s instruction unless where to do so would be contrary to the law.

II.       A registered agent must not take advantage of a principal’s inability to understand relevant documents, where such inability is reasonably apparent.

III.      A registered agent must communicate regularly and in a timely manner and keep the principal well informed of matters relevant to the principal’s interest.

8.        APPRAISALS AND PRICING

I.        An appraisal of land or property must be provided in writing to a principal by a registered agent; must realistically reflect current market value preferably from a registered Estate Surveyor and Valuer, and the principal could be liable to pay full commission to more than one agent in the event that a transaction is concluded.

II.       A registered agent must not impose conditions on principa through agency agreement that are not reasonably necessary to protect the interes of the agent.

III.      A registered agent must submit to the principal all offers concerning the rent, sale, purchase or other disposal of any property or business provided that such offers are in writing.

IV.      A registered agent must retain copies of all offers (whether such offers resulted in transaction or not) foe a period of 12 months.

9.        ADVERTISING AND MARKETING

I.        Unless authorized by a principal through n agency agreement, a registered agent must not offer or market any property or business, including putting details on any website or  by placing a sign on the property.

II.       A registered agent must not advertise any property or business on terms different from those authorized by the principal or professionally acceptable by law.

III.      When authorized by a principal to incur expenses, a registered agent must seek to obtain the best value for the principal.

IV.      A registered agent must take due care to ensure the security of the property or business and avoid risks of damage that may arise from any access to the property or business.

10.      CONFLICTS OF INTEREST

I.        A registered agent must not act in capacity that would attract a commission from parties on more than one side of the same transaction.

II.       A registered agent must not engage in business or professional activity other than the agency work where the business or activity would or could reasonably be expected to compromise the discharge of the registered agent’s obligations.

11.      CONFIDENTIALITY

I.        A registered agent must not disclose confidential personal information relating to a principal, unless;

a.        With the principal’s consent (in writing) or

b.        The registered agent is required by law to disclose the information or

c.        The disclosure is necessary to answer or defend any compliant, claim, allegation or proceedings against the agent by the principal.

II.       Where a registered agent discloses information under I (b) or (c), it may be only to the appropriate person or entity and only the extent necessary for the permitted purpose.

           Lastly, a registered agent must not use information that is confidential to a principal, for the benefit of any other person.