We have recently received a number of enquiries from agents and principals alike, wanting to know what happens when they leave one agency to join another:
Can one legally earn commission whilst waiting for a new FFC under the name of the new employer?
The regulations dealing with FFCs state that if a FFC was issued to an agent and such agent ceases to be employed by the same agency, the agency shall, within fourteen (14) days of such agent ceasing to be in its employ return such certificate to the Board. It is implied that the Board will be informed of the new employer of the agent concerned and that a replacement FFC will then be issued.
It is important to note that no additional payment to the Board is required for this replacement FFC.
The question which is effectively asked and is needing an answer, is whether the regulations referred to above mean that when an agent leaves the employ of an agency, the FFC issued to the departing agent loses its validity.
This is an important question to answer, as Sections 26 and 34A of the Estate Agency Affairs Act cumulatively and effectively prohibit anyone performing the duties of an estate agent or collecting commission if a “valid” FFC has not been “issued” to them.
We believe that the FFC does not lose its validity and that the agent to whom it was originally issued can still legitimately trade. We base this opinion on the decision in the Supreme Court of Appeal matter of RONSTAN INVESTMENTS v LITTLEWOOD 2001.
In this court case, the court observed that the true purpose of Sections 26 and 34A was to ensure that only qualified persons and only those who had paid for the benefit of being insured by the Estate Agents Fidelity Fund could trade as estate agents. With this background, the court quite sensibly found that an FFC, once issued, was valid for the entire year of issue. Put another way, “a certificate is a certificate” and it does not matter where the agent chooses to work from time to time.
We also point out that the legislature in Section 28 of the Estate Agency Affairs Act dealt with the circumstances under which FFC’s can be withdrawn or when they will lapse. If the Regulations dealing with the return of an FFC to the Board were intended to cause the FFC to be withdrawn or to lapse, the legislature could and should have said so in Section 28; it didn’t and this supports our view.
In conclusion then, it is our view that failure to return the FFC for amendment, or, after having returned it and not yet being in receipt of a replacement one, does not prohibit an agent from continuing to work and earn commission. It might result in disciplinary steps being taken by the Board – but this has nothing to do with the fact that the agent has been issued with an FFC for that year.