Professional conduct and ethical behavior are paramount in the world of real estate. To ensure a high standard of professionalism and maintain public trust, real estate professionals often align themselves with associations or organizations and online platforms that uphold these ethical values.
One such organization is the Association of Real Estate Agents - AREA. Membership in AREA carries with it a commitment to adhere to a specific code of conduct, and this commitment indirectly extends to all subscribers of the RED by virtue of its membership to AREA as outlined below.
The Connection: RED and AREA.
The RED, as a real estate platform, derives its membership with AREA through its parent company, Zillion Technologies Ltd, which is an existing AREA member. This affiliation holds more significance than mere formality; it carries substantial responsibilities. As a result of this affiliation, the RED is inherently bound by AREA's code of conduct, an extension of which applies to all RED subscribers.
Recently, we contemplated the development of a unique code of conduct for RED subscribers, in order to supplement our operational terms of service, which primarily address procedural aspects rather than behavioral ones. This initiative aimed to tackle challenges related to the handling of search fees and other behavioral issues within our platform.
However, upon closer examination, we recognized that AREA already comprehensively covers numerous aspects of the real estate agency business in its existing code of conduct. Therefore, there is no need to duplicate these guidelines; instead, we plan to adopt AREA's code of conduct, leveraging the fact that Zillion Technologies Ltd is an established member of AREA.
The Ripple Effect and Expectations for All RED Subscribers.
So, what does this mean for subscribers of the RED? In essence, it means that all subscribers are expected to align themselves with AREA's code of conduct and standards of practice. This commitment goes beyond the RED's terms of service. It means that every action taken by a RED member should reflect the ethical standards set by AREA, and they should not operate in a manner that contradicts or undermines the rules and principles established by this association.
Understanding AREA’s Code of Conduct.
Now that we've established the connection between RED and AREA, allow me to give you a concise look into what AREA's code of conduct entails. This code is divided into various sections, each addressing different aspects of ethical conduct in the real estate industry. Here below is an overview of some key sections:
Commencement and Purpose.
- The code's purpose is to promote and protect the interests of consumers in real estate transactions and to enhance public confidence in the real estate agency work.
- It achieves its purpose by regulating real estate agents, setting industry standards, and providing accountability through a disciplinary process.
Establishment of a Tribunal.
- AREA has a Real Estate Agents Tribunal responsible for supervising the professional conduct of agents, handling complaints, and investigating unsatisfactory conduct.
General Duties.
- Estate agents are expected to protect the public's interest and not engage in activities contrary to the integrity of the profession.
- They must always act in the best interest of their clients and perform their duties with care and skill.
- Agents should not engage in unauthorized practice of law and must recommend legal counsel when necessary.
Mandates.
- Estate agents should not offer or negotiate property transactions without a mandate from the seller or lessor.
- They must not accept conflicting mandates without disclosing the conflict to the client.
Duty to Disclose.
- Estate agents are required to convey all material facts about a property to prospective buyers or lessees.
- Clear disclosure of franchise or trade names is mandatory.
Prohibition Against Undue Influence.
- Estate agents should not influence parties to a transaction in ways that limit their choices regarding attorneys, financial institutions, or financial assistance providers.
Remuneration.
- Agents must not demand or receive commission until specified conditions are met.
Clauses allowing deductions from contract funds are generally discouraged.
Trust Money, Commissions, and Interest.
- Agents must handle trust funds appropriately, including investing them at the best available interest rate.
- Disclosures regarding interest on trust funds are required.
Confidentiality.
- Estate agents must keep client information confidential unless there is a just cause to divulge it.
Vicarious Responsibility.
- Sole proprietors, partners, and company directors are held responsible for their associates' compliance with the code.
Penalties.
- Violations of the code can lead to membership cancellation, fines, or both, as decided by the tribunal.
Something important is missing.
Upon reading the overview of key sections above, it becomes evident that a crucial aspect within the real estate agency business remains unaddressed in the AREA code of conduct: the matter of search fees and their appropriate handling. Search fees have become an enduring element of the unregulated real estate agency landscape in Uganda, evolving organically over the years.
Nevertheless, these fees pose challenges for property buyers and industry stakeholders, as questions linger about their necessity, charging methods, rates, timing (before or after a successful search), and the expectations plus deliverables associated with them.
For instance, if an agent fails to fulfill a buyer's property requirements, should a refund, either in full or part, be issued? Should there be a stipulated timeframe for such refunds? The issue of search fees is a current challenge for us at RED, and we advocate for the inclusion of clauses governing these fees, similar to those for commissions, the inclusion of such clauses is expected to enable effective enforcement.
Given RED's pivotal role in liaising between agents and buyers, we plan to engage with AREA Uganda to propose an amendment to the code of conduct that addresses these issues, to ensure uniformity, consistency, and value for all parties involved.
In conclusion.
Membership in the Association of Real Estate Agents carries significant implications for the RED and its subscribers. AREA's code of conduct sets the ethical framework for real estate professionals, and all RED subscribers are indirectly bound by these standards.
It is essential for both RED subscribers and anyone involved in real estate transactions to be aware of and uphold these ethical guidelines to maintain the integrity of the industry and ensure the trust of consumers. By adhering to these principles, real estate professionals can contribute to a more transparent, trustworthy, and professional real estate market.
Kind Regards
Julius Czar
Author: Julius Czar
Company: Zillion Technologies Ltd
Mobile: +256705162000 / +256788162000
Email: Julius@RealEstateDatabase.net
Website: www.RealEstateDatabase.net
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