MALAYSIAN ESTATE AGENCY STANDARDS
STANDARD 9
CLIENT'S ACCOUNT
9.1.0 INTRODUCTION
9.1.1 All estate agents by the very nature of their practice hold money belonging to other people. It is therefore mandatory that there should be Standards dealing with the estate agents' accounts and the handling of client's money. The purpose of maintaining a Client's Account is to ensure that monies entrusted to registered persons are properly recorded in the accounts maintained and monitored by the firm.
9.1.2 The fiduciary duties of the estate agent are matters the Board views very seriously. Accordingly, breach of the Act, Rules and Standards in respect of fiduciary obligations will be dealt with severely by the Board.
9.2.0 STATEMENTS OF THE STANDARDS
9.2.1 The estate agent shall keep at least one client's account.
9.2.2 Every estate agent who receives client's money shall without delay pay such money into the client's account.
9.2.3 The firm shall not be obliged to pay into a client's account monies held or received by them:-
- 9.2.3.1 in the form of cash and is without delay paid in cash in the ordinary course of business to the client or a third party
- 9.2.3.2 which is received in the form of a cheque or draft in the ordinary course of business payable to the client or third party.
9.2.4 The firm shall only withdraw monies from the client's account in the circumstances laid down in Rule 53.
9.2.5 Every firm which maintains an interest bearing client's account, shall account to such client for the interest earned by such an account.
9.2.6 Every firm shall have an insurance cover for the client's money.
9.2.7 The firm shall once in each period of 12 months deliver to the Board an auditor's report issued by a firm of registered professional auditors.
9.2.8 The firm must be able to account for all monies held on behalf of a client.
9.2.9 The firm shall not deduct any cost or charges from any client's money unless the client has given written consent to do so.
9.2.10 No monies shall be drawn from a client's account except by a cheque drawn in favour of the vendor, purchaser, landlord or tenant or any other party as duly authorized by the client.
9.2.11 Any firm having two or more places of business (i.e. branches or subsidiary companies) shall produce:-
- 9.2.11.1 Separate certificates for separate accounting periods and the auditor's report may be adopted in respect of each place of business; and
- 9.2.11.2 The auditor's report(s) for each year shall cover all client's money held or received by the estate agency firms.
9.2.12 No sum shall be transferred from the account of a client to that of another except in circumstances in which it would have been permissible under the Rules to have withdrawn from a client's account the sum transferred from the first client and to have paid into a client's account the sum transferred to the second client.
9.2.13 Every signatory to a client's account must be one or more of the following:-
- 9.2.13.1 An estate agent in the case of a sole-proprietorship;
- 9.2.13.2 A partner in a case of a partnership; or
- 9.2.13.3 A director in the case of a body corporate.
9.2.14 The Board may appoint any registered estate agent to operate the client's account of a deceased estate agent who had operated as a sole-proprietor.
9.3.0 EXPLANATION TO THE STANDARD
9.3.1 It is absolutely necessary that the client's money and the operating account should be kept separate.
9.3.2 Without delay means within a short period as is reasonably practicable in the circumstances from the moment from what is to be done can reasonable be done.
9.3.3 A register of all clients' accounts must be maintained. These accounts and records must be such as to show in any particular case:-
- 9.3.3.1 the amount received;
- 9.3.3.2 the name and address of the payer;
- 9.3.3.3 whether the sum received is a contract or a pre-contract deposit and in any case, whether it includes any sum in respect of a connected contract;
- 9.3.3.4 the capacity in which the sum is received;
- 9.3.3.5 where different from 9.3.3.4 above, the identity of the person for whom the sum is being received;
- 9.3.3.6 date of receipt
9.3.4 Adequacy of cover means if a claim is made against the firm the insurance must be sufficient to meet the said claim.
Ref:
Verbatim from Standard 9 MEAS 2014.