R6. Prohibition Against Undue Influence

7. Prohibition against undue influence

No estate agent shall without good and sufficient cause, directly or indirectly, in any manner whatsoever, solicit, encourage, persuade or influence any party or potential party to a pending or completed transaction to utilize or refrain from utilizing –

Code:

7.1       the services of any particular attorney, conveyancer or firm of attorneys;

Discussion:

The only person who is legally obliged and competent to pass transfer is the seller of immovable property. Agreements of sale of immovable property for this reason invariably provide that transfer will be affected by conveyancer appointed by the seller. An estate agent may not, therefore, pressurize a seller into selecting a particular attorney, conveyancer or firm of attorneys, merely because the estate agent has a good relationship with them. Estate agents are sometimes of the view that certain conveyancers are able to expedite transfers more than others. This personal view does not justify a seller being influenced to utilize or refrain from utilizing the services of any particular attorney or conveyancer.

It may happen that a seller does not have or know a conveyancer. If asked for a recommendation the estate agent may in such case suggest a particular conveyancer. The selection of a conveyancer by an estate agent acting on specific instruction of a seller does not contravene this prohibition, provided that the seller understood that he had the right to make the selection himself.

Code:

7.2       the services of financial assistance offered by any financial institution to members of the public in general; or

Discussion:

The purpose of this clause is to avoid a situation where an estate agent promotes a particular financial institution with a view to furthering his own personal interests. Competition between financial institutions to grant home loans is fierce and an estate agent cannot for personal reasons favour one institution over another.

However, nothing prevents an estate agent from furnishing a purchaser with details of the loan packages offered by various financial institutions. For example, it is permissible for an estate agent to advise a purchaser that his estate agency firm acts as an agent for a specific financial institution, and to explain to such purchaser the institution’s loan policy. In so doing the estate agent must, however, be careful not to convey to the purchaser that such institution’s services are better or more professional than those of other similar institutions or that the lending policy of institutions is suspect. The test is simply whether the estate agent is trying to force the purchaser into a certain direction or is providing genuine information to assist him in deciding which institution to approach for a loan.

Code:

7.3       the financial assistance offered to such party by any person.

Discussion:

What has been said in respect of clause 7.2 is also applicable to clause 7.3

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