Think it could never hap­pen to you? Poor ad­min­is­tra­tion, lack of dili­gence and a few loose ends mean that los­ing your li­cence is only too pos­si­ble, as Natalie Hast­ings ex­plains.

Elite Property Manager - - Contents - Natalie Hast­ings

Have you ever seen How to Lose a Guy in 10 Days? It’s a laugh-out-loud rom-com star­ring Matthew McConaughey and Kate Hud­son which de­picts an ar­ray of clas­sic re­la­tion­ship faux pas – guar­an­tee­ing the char­ac­ters a one-way trip to sin­gle­town.

In my role as a real es­tate trust ac­coun­tant and trainer, I’ve seen real-life prop­erty in­dus­try ver­sions of this film – but they’re far from funny, and of­ten re­sult in heavy fines and even jail time. It’s called ‘How to Lose Your Li­cence in 5 Easy Ways’.

Here’s how to do it – although we rec­om­mend you tak­ing best prac­tice in your es­tate agency with the se­ri­ous­ness it de­serves, draw­ing upon ap­pro­pri­ate train­ing, ed­u­ca­tion, tech­nol­ogy and sup­port as re­quired. • Play­ing with other peo­ple’s money. It’s called a trust ac­count for a rea­son, not a ‘please use clients’ funds for your own busi­ness or per­sonal ex­penses’ ac­count. In­ap­pro­pri­ate use of funds rep­re­sents a breach in trust ac­count, and more agents are ‘done’ for this each year than you might ex­pect. Equally se­ri­ous is not cor­rectly record­ing trust ac­count trans­ac­tions; this is mis­use, but not fraud. • Lais­sez-faire with li­cens­ing. Pressed for time and on a tight bud­get? Some agents fall into the trap of hir­ing staff who are not li­censed – ei­ther by ne­glect­ing to dou­ble-check, or by ignoring their lack of a for­mal li­cence for rea­sons of their own. When a trust ac­count­ing or fraud is­sue then ap­pears, it’s ‘too lit­tle too late’ in the eyes of their de­frauded clients, and the law. An­other re­lated way to lose your li­cence is to ne­glect in­dus­try train­ing and other ba­sic re­quire­ments of li­cence­hold­ing. It’s more than just achiev­ing CPD points! • What­ever, pa­per­work. Laterz, com­pli­ance. Prin­ci­pals on a one-way street to li­cence-los­ing are those who put pa­per­work and au­dit­ing on the ‘to-do’ list. They don’t keep crit­i­cal pa­per­work safe (such as signed man­age­ment or sales agree­ments), will have vir­tu­ally no sys­tems and pro­cesses around doc­u­ment man­age­ment, and it’s likely the OIEC won’t have been sign­ing off on end-of-month pa­per­work. An­other sign of a busi­ness on its way to li­cens­ing obliv­ion is a lack of cor­rect li­cens­ing sig­nage on their front door.

• Nudge nudge, wink wink. Fancy a lit­tle some­thin’ some­thin’ on the side in terms of kick­backs and cash money from re­fer­rers? You’re well on your way to los­ing your li­cence. Ac­cept­ing bonuses and pay­ments from af­fil­i­ated val­uers, in­spec­tors and part­ners is al­ways in­ap­pro­pri­ate as an es­tate agent. In fact, it’s il­le­gal for an agent to re­ceive favours, gifts or money from associated ser­vices or re­fer­ral part­ners. • We don’t need no ed­u­ca­tion. You do, ac­tu­ally. The best agen­cies put time and money into up­skilling their teams reg­u­larly. They ac­tively seek out peer men­tor­ing, tech train­ing and look to their lo­cal real es­tate in­sti­tutes for valu­able CPD-point gar­ner­ing ed­u­ca­tion. They are usu­ally rich with safety valves in their busi­nesses (bet­ter known as pro­tec­tive sys­tems and pro­cesses). As con­sumers grow in­creas­ingly ed­u­cated about prop­erty in­vest­ment, the real es­tate in­dus­try has fur­ther pro­fes­sion­alised. An agency that thinks it ‘knows it all’ and falls be­hind – silo­ing it­self in di­nosaur philoso­phies about ser­vice – is at risk of fail­ing to be com­pli­ant and los­ing its li­cence. So there you have it: how to lose your li­cence in five easy ways. No one wants to com­mit fraud, en­dan­ger them­selves or their clients, or fail at be­ing an agent – but if you let your stan­dards fall, it’s a slip­pery slide to­wards los­ing your li­cence and your busi­ness. ■


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