AGENCY LAW: ESTATE AGENCY

INTRODUCTION

Estate agency is not simply a commercial activity, as one side claims; neither is it a non-commercial profession. It is a combination of the two and the elements of both salesmanship and professionalism should be combined systematically to the greatest advantage of the consumer (Greve John, University of Leeds, UK).


Estate agents serve industry and commerce, but it is the public in the wider sense on whom they depend. If they fail to keep the interests of that public in the forefront of their thinking, they will fail. It is unfortunate, that those who have looked closely into the operation of estate agents, looked only to the residential market and even then only to the buying, selling and letting of houses. By so doing, they inadvertently, separated away what many firms and individuals see as one part of a general practice. It follows that they have ignored those fields such as valuation, appraisal, land economics, property development and management, surveying and town planning where the professional training and knowledge of the general practitioner can be seen to be vital.


Marketing methods change, public demand and improved mechanical and electronic aids may dictate changes in approach and methods. As new means of communication become available, staffing levels accepted for years may become uneconomic, including consumer protection legislation. All these are factors that could dictate change. Hence, dramatic changes in the agent’s approach to marketing and many allied matters will have to be made if profession of the land is not to lose control of one of its principal functions – that of marketing.


Estate agency should be conducted by men and women with a background of professional knowledge who acknowledge and follow ethical standards prescribed by the leading professional bodies of the land (The Nigerian Institution of Estate Surveyors and Valuers NIESV) and the regulatory board the Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON). Any other outcome would not be in the public interest.

OBJECTIVES

The objectives of this unit are:

• Explain the meaning of estate agency. 
• Identify the types of estate agent. 

What is Estate Agency

An estate agent is one who acts for, and usually advises the principal in respect of transactions involving real estate. Estate agency practice covers a very wide field – houses and flats with vacant possession, factories, shops, offices, licensed premises, businesses as going concern, hotels, farms and land. It covers the disposal by way of sale of both freehold and leasehold interests. It covers lettings of residential, commercial, industrial and agricultural property. In no field can an agent provide a competent service without a basic knowledge of the principles of valuation, or without a knowledge of the law as it applies to that field.

No one would deny the fact that little professional knowledge is required to market the standard dwelling house not affected by blight, with no unexploited development potential and basically sound, and some practicing agents do little more than this. One would not deny the ability of the average house owner to dispose of his own house. Many do so, but the reasons why the majority choose to use the services of an agent are matters involving: knowledge of building construction, planning blight and remedies open to client affected,

basic compensation rules, town planning rules, rent control edict, estate duty, capital gains tax, development levy and others on which he should be well informed.


Valuation or appraisal practice is carried out in Nigeria under the name and style of estate surveying and valuation. The practice is controlled by two bodies. One is the Nigerian Institution of Estate Surveyors and Valuers (NIESV) which is a professional association. 

The other is the Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON) a government regulatory body. NIESV referred to as “The Institution” was founded in 1969 and recognized by law in 1975 via Decree No. 24 of 1975. Prior to 1969, valuation practice in Nigeria was operated under the Royal Institution of Chartered Surveyors (RICS) of Great Britain and the Commonwealth to which most of the senior members of the profession still belong. There is also a Nigerian chapter of the RICS. The RICS is an umbrella institution for all surveying professions – land surveying, valuation surveying, quantity surveying, mine surveying. 

The NIESV is exclusive to estate surveying and valuation. Nevertheless, “The Institution” is structured on the lines of the RICS. The profession of estate surveying and valuation is defines by the Decree 24 as:

Those engaged in the art, science and practice of:

1. Determining the value of all descriptions of property and of the various interests therein; 
2. Managing and developing estates and other business concerned with the management of landed property; 
3. Securing the optimal use of land and its associated resources to meet social and economic needs;
4. Determining the structure and condition of buildings and their services and advising on their maintenance, alteration and improvement; 
5. Determining the economic use of these resources by means of financial appraisal for the building industry; 
6. Selling (whether by auction or otherwise) buying or letting as an agent, real or personal property or any interest therein. 

The law establishing the profession of estate surveying and valuation in Nigeria included the estate agency as part of the functions of estate surveyors and valuers in Nigeria. Notwithstanding, presently in Nigeria it is all comers affair and there is an association of estate agents. Entering is easy, and requires neither qualification nor previous experience. There is Estate Agent Act of 1979. No one professional body dominates it, although there can be no doubt that some of practicing estate agents are members of the Nigerian Institution of Estate Surveyors and Valuers.


One needs to comment on the cut-price estate agent. Many believing that estate agency was a way to make easy money and believing that existing charges were too high in which perhaps they were encouraged by the media and such bodies sought to set up business charging in a variety of ways, but at a level significantly below the charges by the established agents in the area. Some charged lower rates of commission, others set fee for a specific service. The property supermarket idea was one of the latter. However, literature has shown that such firms in UK had either gone under, or had increased charges to the normal level.

SELF ASSESSMENT EXERCISE 1

• What is estate agency? 
• Why is estate agency all comers’ affairs?