Ethical Issues in Real Estate Brokerage and Agency

ESV Sir Charles Onyebuchi Uwaga,

The real estate industry is built on trust, integrity, and professionalism. As intermediaries between buyers, sellers, landlords, and tenants, real estate brokers and agents play a pivotal role in ensuring fair transactions and protecting clients’ interests. However, in many developing markets, Nigeria included, ethical challenges continue to undermine the credibility of the profession. Addressing these ethical issues is crucial for strengthening the integrity of the real estate sector and fostering public confidence.
At the heart of real estate brokerage is the fiduciary duty, the obligation of brokers and agents to act in the best interest of their clients. This duty includes honesty, loyalty, confidentiality, and full disclosure. Unfortunately, breaches of these ethical principles are common. Some agents prioritize personal gain over client welfare, misrepresenting property details, concealing defects, or inflating prices to secure higher commissions. Such practices not only harm clients but also erode the trust upon which the profession is founded.

One major ethical concern is misrepresentation and false advertising. Unscrupulous agents often market properties using misleading descriptions or edited images that create false impressions. In extreme cases, they advertise properties that do not exist or that have been sold already, just to attract clients. This deceptive behavior not only violates ethical standards but also exposes buyers to financial and emotional loss.

Another widespread issue is conflict of interest. Agents are expected to act impartially and prioritize their clients’ needs, yet some engage in double-dealing—representing both buyer and seller in the same transaction without full disclosure. This practice, though sometimes legal, poses significant ethical risks because it compromises objectivity and fairness. The agent’s loyalty becomes divided, leading to biased advice that favors one party over the other.

Lack of transparency in commission structures is also a common ethical challenge. Some agents fail to disclose the exact amount of commission or introduce hidden charges after deals are concluded. Ethical practice demands that all fees, commissions, and terms of service be clearly stated before a transaction begins. Transparency not only builds trust but also sets the tone for professionalism in the industry.
In addition, bribery and kickbacks have become a concern in property transactions. Some brokers and agents offer or accept inducements to influence decision-making processes such as securing government allocations, mortgage approvals, or client referrals. These unethical practices distort market operations and give unfair advantages to dishonest practitioners.

Furthermore, the unauthorized handling of client funds presents serious ethical and legal implications. Brokers are often entrusted with large sums as deposits or rents, yet some misuse these funds for personal gain. Such conduct violates professional ethics and can result in severe legal penalties.
To address these challenges, stronger regulatory frameworks and professional oversight are necessary. Licensing bodies and real estate associations must enforce strict codes of conduct, ensuring that only qualified and ethical practitioners operate in the market. Regular training on professional ethics should be mandatory, emphasizing the importance of honesty, confidentiality, and client-first principles.
Technology can also help promote transparency. Digital property listing platforms, for instance, allow clients to verify property details, ownership records, and agent credentials reducing opportunities for fraud and misinformation.

Ultimately, ethical conduct is not just a legal obligation; it is the backbone of professional reputation. Real estate brokers and agents who uphold ethical standards not only safeguard their clients’ interests but also elevate the credibility of the entire industry. Integrity, transparency, and accountability must therefore remain the guiding principles for all real estate practitioners committed to building a sustainable and trustworthy property market.

Uwaga, a registered Estate Surveyor and valuer, is the Senior Partner/CEO of Uwga & Company