The facts of the case
The case concerned a real estate agent working as a self-employed member of a real estate agency. The agency itself was not registered on the IPI/BIV register, but its directors were, as was the agent concerned. The firm also acted as property manager (administrator) for several associations of co-owners (ACOs).
In that capacity, the real estate agent committed a number of errors in the management of several ACOs. These included managing ACOs without a valid property management agreement or without a separate bank account, failing to pay suppliers and insurance premiums on time, and making an incorrect registration of the CBE number at the start of a property manager mandate.
The disciplinary proceedings before the IPI/BIV
The Executive Chamber of the IPI/BIV (the disciplinary body responsible for handling disciplinary cases involving real estate agents under IPI/BIV supervision) acknowledged that the agent had committed disciplinary offences. Nevertheless, the agent was acquitted because a director of the real estate firm had designated himself as the ethical practice officer and had declared that he would assume liability for the established disciplinary offences.
This reasoning was upheld by the Chamber of Appeal, the body competent to hear appeals against decisions of the Executive Chamber.
The judgment of the Court of Cassation
The Court of Cassation rejected this reasoning and quashed the decision of the Chamber of Appeal. The Court emphasised that every individual registered under the IPI/BIV register is personally liable, from the perspective of ethical practice, for the offences he or she personally commits in the practice of the profession. This remains the case even where:
- the real estate agent operates as a self-employed member within a legal entity;
- the real estate agent carries out assignments at the instruction of the firm’s directors; or
- the real estate agent subsequently rectifies his/her errors.
In the Court’s view, internal arrangement or allocation of functions cannot deviate from this statutory obligation. The fact that a director presents himself as the liable person does not detract from the individual agent’s personal liability for disciplinary offences either.
Significance for real estate practice
With this judgment, the Court of Cassation makes it clear that internal structures within real estate agencies do not provide protection against liability for disciplinary offences. Arrangements such as appointing an “ethical practice officer” or other internal divisions of responsibility cannot prevent each individually registered IPI/BIV real estate agent from remaining personally liable for his or her own actions.
The message is clear: anyone registered with the IPI/BIV bears personal responsibility for their professional conduct. This responsibility rests with an individual and cannot be transferred to others.
