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Case 2: Solicitation of Illegal Commission from Subordinates

A senior manager of an estate agency learned that an estate agent, who is his subordinate, might procure a property transaction.  He told the estate agent that he would assist in negotiating the price of the property and solicited from the estate agent part of the commission payable to the latter by the estate agency.  The estate agent eventually secured the deal and received commission from the estate agency but did not accede to the senior manager’s request.

Offences Committed

The senior manager is an agent of the estate agency.  He solicited advantage (i.e. part of the commission to be paid to the estate agent by the estate agency) from the estate agent as a reward for assisting the latter to negotiate the price of a property, which was an act relating to the affairs of the estate agency (i.e. his principal).  As the senior manager solicited advantage without the estate agency’s permission, he had contravened Section 9(1) of the POBO and was sentenced to imprisonment.

Case in Perspective

In this case, the senior manager pressured his subordinate to give him illegal commission, failing to uphold the ethical standard required of him.  He not only ruined his reputation but also his career.

An estate agency should lay down appropriate procedures and safeguards for proper sharing of commissions with staff and preventing staff from receiving any illegal commission from subordinates.  For example,

  1. Lay down guidelines and make known to all staff the policies and procedures for sharing commissions with staff, including the eligibility criteria, the method of calculations (e.g. commission rates, “jumping bar” system) and time of payment, etc.

  2. Require the staff involved in estate agency work to accurately and clearly record the property transactions handled by them.

  3. Specify the eligibility criteria and circumstances under which a staff is entitled to receive commission for a property transaction.

  4. Provide a channel and encourage staff to report irregularities and malpractice to a designated senior staff in a confidential manner.

  • Other tips/references are provided on the Estate Agents Authority's website
  • Best Practice Checklist on Governance and Internal Control of Estate Agencies
  • Service Request Form
  • Contact us for corruption prevention advice