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How Some Agents Cheat in Subsale, Rental, and Project Deals

ListingMine Academy | Industry Governance & Market Integrity

Malaysia’s property industry is regulated on paper — but weaknesses in enforcement, workflow design, and transaction systems still allow unethical individuals to exploit loopholes.

This article breaks down, with precision, how some agents cheat across the three major segments of the Malaysian market:

• Subsale (Sales)
• Rental
• New Projects (Developer Sales)

And most importantly, why these patterns persist, and how to structurally eliminate them.

1. Subsale (Sales) Cheating Methods

Subsale transactions involve high-value negotiation and multiple parties. This creates opportunities for manipulation by unethical agents.

1.1. Personal Account Deposit Collection

A classic Malaysian fraud.

Tactics:

• Asking buyers to transfer earnest deposits into personal accounts.
• Claiming “owner urgent,” “company slow,” or “receipt later.”
• Holding funds to pressure buyers.
• Delaying transfer to sellers to manipulate negotiations.

The Risk: Funds are untraceable and can vanish instantly. This bypasses all consumer protections.

1.2. Price Manipulation Between Buyer and Seller

Agents exploit the information gap.

Methods:

• Telling buyers the seller is “very firm.”
• Telling sellers the buyer “cannot go higher.”
• Pocketing the difference between actual and claimed prices.
• Forcing buyers to pay extra "top-up fees."

Outcome: Both buyer and seller lose — the agent gains excessively.

1.3. Fake Listings

Used to generate leads and manufacture urgency.

Patterns:

• Advertising units already sold.
• Posting fake or copied photos.
• Listing unrealistically low prices.
• Using "bait units" to divert buyers to other listings.

Outcome: This distorts the market and wastes consumer time.

1.4. Withholding Critical Information

Hiding:

• Unit number.
• Existing tenancy.
• Defects / water damage.
• Legal disputes or pending auctions.

Goal: Withholding is used to reduce buyer scrutiny and force a quick close.

1.5. Pressure Tactics

Common lines:

• “Another buyer is transferring now.”
• “Owner wants to cancel, act fast.”
• “Loan confirm approve.”
• “Price only valid today.”

🚩 Subsale Red Flag Checklist

• Agent insists on personal bank account for booking.
• "Owner urgent" claims with no supporting documentation.
• Agent discourages you from speaking to your own lawyer.
• Unit number withheld until deposit is paid.
• Price keeps changing without written justification.
• Agent discourages independent valuation.
• Unofficial “top-up fees” requested in cash.

2. Rental Cheating Methods

The rental market is the most exploited segment due to fast deposits, low documentation, and weak enforcement.

2.1. Personal-Account Deposit Scams

Common among illegal negotiators.

Methods:

• Collecting 1+1+½ deposits into personal accounts.
• Giving excuses: “owner unavailable” or “processing.”
• Delaying transfer to landlords.
• Disappearing after collection.

Outcome: Landlords lose the tenant; tenants lose their money.

2.2. Overseas Landlord Scam: Agent Pocketing Monthly Rent

One of Malaysia’s most damaging rental scams.

How it works:

• Owner is overseas (Singapore, Australia, UK, etc.).
• Agent claims “market slow, still finding tenant.”
• In reality, the unit is already rented.
• Tenant pays rent to agent’s personal account.
• Agent pockets monthly rental for months or years.

Why it works:

• Owner seldom inspects.
• Owner relies on WhatsApp updates.
• No system exists for owners to verify tenancy status.

2.3. Fake Units & Bait-and-Switch

The Pattern:

• Fake photos with unrealistically low rental.
• After inquiry, agent says: “That unit taken — I have another one.”

Goal: A lead-harvesting tactic to push tenants to commission-heavy units.

2.4. Illegal Extra Fees

Not allowed under law but frequently charged:

• Viewing fees.
• Key-handling fees.
• Private "admin" fees.
• Overcharging tenants and pocketing the difference.

2.5. Switching Units Last-Minute

Designed to trap tenants:

• Advertise Unit A.
• Show Unit A.
• Claim owner changed terms at the last second.
• Push tenant into Unit B where the agent earns more.

🚩 Rental Red Flag Checklist

• Deposit requested to personal account.
• Owner is "always overseas" and unreachable via video call/email.
• No official tenancy agreement draft provided before payment.
• Rental price differs from what the landlord expects.
• Agent refuses to reveal utility arrears.
• No inventory list provided at handover.
• Agent aggressively blocks direct landlord-tenant communication.

3. Project Marketing Cheating Methods

New project sales often result in the largest financial losses, especially among first-time buyers.

3.1. Booking Fees Collected via Personal Accounts

Still happening, especially with freelance project teams.

Tactics:

• “Pay first, receipt later.”
• “Company slow; pay me first to secure.”

Risk: RM3,000–RM20,000 can vanish instantly.

3.2. Duplicate Bookings

Occurs when agencies lack proper CRM.

Patterns:

• Multiple agents book the same unit.
• Receipts intentionally delayed.
• Buyers fight for allocation.
• Refunds are slow or denied.

3.3. False Discounts & Priority Schemes

Examples:

• Fake "internal rebates."
• Selling “priority access” fees.
• Unauthorised discounts not recognised by the developer.

3.4. Misrepresenting Loan Eligibility

To avoid cancellation and secure the booking:

• “Loan confirm approve.”
• “Bank will support your income.”
• “Your DSR is fine.”

Result: When banks reject the loan, the buyer loses the booking fee or faces penalties.

3.5. Overpromising & Hiding Risks

• Exaggerating rental returns (GRR claims without legal backing).
• Guaranteeing capital appreciation.
• Hiding competing supply in the same area.
• Misrepresenting completion timelines.

🚩 Project Sales Red Flag Checklist

• Booking fee requested to personal accounts.
• Receipt "will issue later."
• Promised “internal rebates” are not in writing.
• Multiple agents claiming to hold the same unit.
• “Loan confirm can get” without a proper DSR calculation.
• Urged to sign documents before reading the SPA/LOU.
• Discounts offered do not match the official developer brochure.

4. The Hidden Layer: When Individual Fraud Becomes a Company Operation

Misconduct in Malaysia does not always start with a company — but it often ends up becoming one.

4.1. Individual → Team → Company

The progression typically looks like this:

• One agent discovers a loophole.
• Agent outperforms peers; commissions rise.
• Team leader replicates the method.
• Company informally adopts it as "SOP."

It becomes an internal culture. The misconduct becomes operationalised.

4.2. When Caught: Blame the Agent, Protect the Organisation

The standard industry response:

• “It was the agent’s personal action.”
• Issue cosmetic disciplinary action.
• Transfer the agent to another team.
• Pay a small fine.

The company keeps the profit. The agent becomes the scapegoat.

4.3. Why This Happens

• Fraud offers higher speed and margins than compliance.
• Detection risk is low.
• Pressure to hit sales targets incentivises shortcuts.
• Unethical systems outperform ethical ones in the short term — unless the system itself changes.

5. Why These Problems Persist

This is not a training issue. It is not a knowledge issue. It is not an ethics issue.

It is structural.

Malaysia currently relies on:

• Weak enforcement.
• Manual workflows.
• WhatsApp-based processes.
• No verified inventory.
• No digital custody of deposits.
• No role separation.
• No audit trails.

As long as there are weaknesses in the system, people will continue to exploit them — individually or organisationally.

6. What the Industry Needs to Move Forward

Misconduct stops only when systems make cheating:

• Impossible
• Unprofitable
• Traceable
• Punishable

To do this, Malaysia needs to shift from trust-based to proof-based operations.

6.1. Verified & Traceable Inventory (Single Source of Truth)

The current MLS / co-agency model fails because anyone can advertise anything with no proof of authorship or price-change audit trails. Verification must be systemic, enforced, and non-optional.

6.2. Digital Custody of Deposits

Eliminates 70% of all fraud.

• No personal account handling.
• Automatic receipts.
• Immutable transaction logs.
• Custody separation from negotiators.

6.3. ACN-Style Role Separation (Single-Point Accountability)

Current models are listing-centric, not workflow-centric. They do not assign specific responsibility for verification, viewings, or closing.

The ACN model solves this:

• Each role has clear accountability.
• All actions have timestamped proof.
• No single agent can hijack the information flow.

6.4. Transparent Co-Broking (Proof of Communication)

The co-agency system currently runs on disappearing WhatsApp messages. It needs audited communication, logged handovers, and traceable offer submissions to eliminate sabotage.

6.5. Automated Documentation & Audit Trails

Every key event—viewings, offers, counteroffers, deposits—must be logged. If it’s not logged, it never happened.

6.6. Real-Time Compliance Monitoring

Shift from Complaint-driven (reactive) to System-driven (proactive). Only then does misconduct become visible, risky, and enforceable.

Disclaimer

This article highlights wrongdoing to educate both consumers and industry professionals. The majority of Malaysian agents and agency leaders are honest, ethical, and hardworking. Only a small minority commit the practices described above. BOVAEP, the police, and enforcement authorities are actively cracking down on such misconduct, and there is a clear downward trend in recent years. However, isolated cases still exist — and awareness is essential for prevention.