Illegitimate referral of deals
Q :

I work in a medium-sized estate agency company. Recently a client of mine, having been introduced to many properties by me, finally came to a decision and instructed me to negotiate for a good price with the vendor. Just as the vendor and my client were close to an agreement, the boss of another agency company in the neighbourhood approached me and suggested that, if I would refer the client to him, then he would give me an "introduction fee" which would exceed my share of the commission to be derived from the deal. Would I be committing an offence if I referred my client to the other firm? And how would the client himself be affected by this kind of referral?

A :

A practitioner who refers a client of his company, without the knowledge or consent of his employer, to another company in order to obtain undue advantage, or who induces an employee of another company to refer that other company's clients to him with the promise of advantage, is acting inappropriately. His action may also be prejudicial to the interests of the client concerned.

A practitioner or company practising such an act may have infringed the EAA's Code of Ethics for the unfair advantage he has obtained. It may even be a corrupt transaction under the Prevention of Bribery Ordinance and, that being the case, the parties to the corrupt transaction may have committed a criminal offence. Practitioners are therefore strongly warned against illegitimate referral of business.

On the other hand, if a prospective purchaser has already signed an estate agency agreement with the original company, then he may be pursued for commission by the original company and hence suffer loss.

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