Real estate is one of the most trusted industries — and also one of the most vulnerable to unethical practices. Every year, thousands of Kenyans buy or sell property, relying on agents, developers, and brokers to guide them through complex transactions. Yet, not all professionals uphold the honesty and integrity the job demands.
Unethical behaviour in real estate can destroy trust, cause massive financial losses, and even lead to legal consequences. It doesn’t always involve outright fraud — sometimes it’s subtle, like giving half-truths to close a sale, or failing to disclose a property’s real condition.
Understanding these behaviors is essential, not only for protecting buyers and sellers but also for helping honest agents build lasting reputations. Let’s explore the most common unethical practices in the property market — with real examples from Kenya and beyond — and how they can be avoided.
The Meaning of Ethics in Real Estate
Ethics in real estate refers to the moral principles and professional standards that guide how agents, developers, and investors conduct business. These standards ensure fairness, honesty, and respect for clients and the public.
In Kenya, registered agents are bound by the Estate Agents Act (Cap 533) and are regulated by the Estate Agents Registration Board (EARB). Ethical behavior is not just good practice — it’s a legal obligation.
But even with these laws, unethical actions still happen. Sometimes it’s pressure to meet sales targets, other times it’s greed or ignorance. Whatever the reason, unethical behavior harms everyone: clients, the agent’s career, and the reputation of the real estate industry.
Misrepresentation and False Advertising
One of the most widespread unethical acts in real estate is misrepresentation — providing false or misleading information about a property.
This could mean exaggerating property features, lying about ownership, or concealing defects to make a sale.
Examples include:
Advertising a plot in Kitengela as “prime and fully serviced” when it lacks water and power.
Claiming an apartment in Nairobi has a “ready title” when ownership documents are still pending.
Using digitally edited images to make houses appear larger or more luxurious than they are.
While some agents argue this is just “marketing,” it’s deception. Misrepresentation violates consumer rights under the Consumer Protection Act (2012) and can lead to lawsuits or license suspension.
Honest marketing should highlight genuine strengths — not create illusions.
Failure to Disclose Material Facts
Another major unethical practice is failing to disclose important information about a property.
Agents have a duty to tell clients about any issues that might affect the property’s value or use. Hiding such details is dishonest, even if the agent didn’t cause the problem.
For instance:
Selling land without revealing it’s located within a flood-prone area.
Failing to mention ongoing ownership disputes or court cases.
Ignoring structural defects, like cracked walls or poor drainage.
Not informing a buyer that the land sits on a riparian reserve.
In Kenya, many unsuspecting buyers have lost money due to such omissions. An agent might think they’re helping close a deal, but the long-term damage to reputation and legal risk far outweigh the short-term gain.
Dual Agency Without Disclosure
Dual agency happens when one agent represents both the buyer and the seller in the same transaction. While this isn’t always illegal, it becomes unethical when not disclosed to both parties.
When an agent secretly represents both sides, conflicts of interest arise. Whose interest do they serve — the buyer wanting a lower price or the seller demanding more profit?
Ethical practice demands transparency. Both clients must give informed consent if the agent wishes to act for both parties.
Unfortunately, some agents hide this fact to earn double commission. This erodes trust and violates professional ethics under EARB standards.
Inflating Property Prices for Higher Commission
Another unethical behavior common in real estate is price manipulation.
Some agents intentionally overprice properties to increase their commission, knowing that they earn a percentage of the sale price.
A seller might list land for KSh 3 million, but the agent tells the buyer it’s KSh 3.5 million — pocketing the extra KSh 500,000 as “commission.”
This is outright fraud. It’s dishonest, and once discovered, it can lead to lawsuits or criminal charges.
Ethical agents should charge transparent commissions agreed upon in writing — not secret markups hidden from clients.
Taking Undisclosed Kickbacks
Kickbacks — or secret payments — are another form of unethical practice.
For example, an agent may recommend a specific lawyer, valuer, or developer to a client not because they’re the best, but because the agent gets a hidden commission for referrals.
The client assumes the recommendation is genuine, but in reality, the agent benefits personally.
While referral partnerships are acceptable when disclosed, secret kickbacks are unethical because they mislead the client and compromise professional judgment.
Transparency ensures clients can trust that advice given is in their best interest, not driven by hidden deals.
Discrimination in Property Sales or Rentals
Real estate professionals must treat all clients fairly, regardless of race, religion, gender, age, or social class.
However, unethical discrimination still occurs. Some landlords instruct agents not to rent to specific groups — for instance, single mothers, students, or foreigners.
Others may price properties differently based on who is asking.
Such behavior violates Kenya’s Constitution (Article 27) and the principles of equality and non-discrimination. It also harms the agent’s brand image and excludes legitimate clients from the market.
An ethical agent promotes inclusivity and equal access to housing — not selective prejudice.
Breach of Confidentiality
When clients share personal or financial information, they trust that the agent will protect it. Breaching that trust by sharing private details without consent is unethical.
Examples include:
Revealing a client’s financial situation to competitors.
Telling other agents about the price limits of a buyer.
Sharing a seller’s desperation to offload property quickly.
These breaches give others an unfair advantage and can cause significant financial harm.
Ethical agents maintain confidentiality at all times — even after a transaction ends.
Failure to Verify Ownership and Documentation
Due diligence is a cornerstone of ethical real estate practice. Yet, many unethical agents skip verification, exposing clients to fraud.
Before marketing property, an agent should confirm:
Ownership through official searches at the Ministry of Lands.
Whether the land is freehold or leasehold.
Any existing encumbrances or caveats.
County zoning and development regulations.
Ignoring these checks is negligence. It’s not enough to rely on what a seller claims. An ethical agent protects clients by ensuring all documentation is legitimate and up to date.
Fake Listings and Phantom Properties
Fake listings are one of the fastest-growing unethical trends, especially online. Unscrupulous agents or scammers post photos of properties that don’t exist — or are already sold — just to attract inquiries.
When clients call, they’re told the property was “just taken” but are offered other options. This bait-and-switch tactic wastes time and misleads the public.
It’s a short-term trick that damages long-term credibility. In a digital age where reviews spread quickly, fake advertising can destroy a brand overnight.
Ethical agents only advertise genuine, available properties with the owner’s consent.
Overpromising Returns or Investment Opportunities
Another unethical habit is exaggerating investment potential.
You’ll often see ads claiming “200% ROI in six months” or “guaranteed rent returns” on new developments. Most of these claims are unrealistic.
An honest agent should explain risks and market factors clearly. For instance, while property in Ruiru or Ruaka may appreciate fast, returns still depend on infrastructure, demand, and economic conditions.
Overselling creates false hope and often ends in disappointment or lawsuits.
Ethical marketing focuses on facts — not fantasies.
Mishandling Client Money
Real estate often involves large sums of money — deposits, commissions, or rent payments. Unethical agents sometimes misuse or delay these funds.
Examples include:
Collecting deposits and failing to forward them to sellers.
Withholding rent from landlords.
Mixing client money with personal funds.
This behavior is both unethical and criminal. In Kenya, professional agents are expected to use escrow accounts for handling client money securely.
Transparency and proper documentation in all financial dealings protect both the agent and the client.
Collusion and Insider Deals
In some cases, agents collude with other parties to exploit clients.
For example, an agent may conspire with valuers to inflate property prices, or with developers to hide pending approvals. Others might secretly buy properties at low prices before reselling them at inflated rates.
Such insider behavior is unethical because it manipulates the market and misleads clients.
Ethical agents avoid conflicts of interest and always act in their clients’ best interests.
Neglecting Professional Competence
Ethics isn’t just about honesty — it’s also about competence.
An agent who lacks knowledge of market trends, legal requirements, or property valuation but still advises clients is acting unethically. Poor advice can cause massive losses.
For example, failing to inform a buyer about zoning restrictions, or advising a developer without understanding building code compliance, can lead to costly consequences.
An ethical agent continually updates their skills, attends training, and seeks expert help when needed.
Exploiting Client Trust
Clients, especially first-time buyers, often trust their agents completely. Some unethical agents take advantage of this trust through pressure tactics or emotional manipulation.
You’ll hear phrases like:
“If you don’t buy now, someone else will.”
“I’ll hold this deal only for you.”
“You can trust me; no need for a lawyer.”
This high-pressure selling style is unethical. Real estate deals should be based on informed, voluntary decisions — not emotional coercion.
An ethical agent gives clients time to think, encourages independent legal advice, and avoids manipulation.
Copying or Stealing Another Agent’s Work
In a competitive market, some agents steal other professionals’ listings, marketing materials, or photos without permission.
They repost property photos from legitimate agents and claim to represent the same property. This confuses clients and damages the industry’s credibility.
Ethical agents respect intellectual property and collaborate honestly instead of copying others’ work.
Ignoring Client Instructions
Once an agent is hired, they’re bound to follow the client’s lawful instructions. Ignoring or overriding those directions for personal gain is unethical.
For example, selling property below an agreed minimum price, or accepting an offer without consulting the client.
An ethical agent always seeks the client’s approval before finalizing decisions.
Negligence and Poor Record Keeping
Failing to maintain proper records, contracts, or communication logs can also be unethical — especially when it harms clients.
In disputes, missing documentation makes it impossible to prove what was agreed.
Good agents keep detailed records of every transaction, correspondence, and signed document. This transparency helps resolve conflicts quickly and builds credibility.
The Impact of Unethical Behaviour on Kenya’s Real Estate Market
Unethical practices hurt everyone — clients, agents, and the industry.
They lead to:
Loss of public trust.
Increased government regulation.
Reduced investment confidence.
Bad publicity for honest agents.
When buyers lose faith, transactions slow down, and property values may even fall in some regions. The long-term health of Kenya’s real estate market depends on integrity and professionalism.
How to Promote Ethical Standards in Real Estate
Building a more ethical real estate sector starts with individual responsibility and strong professional culture.
Steps to encourage ethical behavior include:
1. Training and Licensing – Agents should undergo continuous professional education and renew licenses through EARB.
2. Clear Contracts – All transactions should be documented in writing to prevent misunderstandings.
3. Transparency – Be honest about property conditions, prices, and commissions.
4. Accountability – Maintain open communication and accept responsibility for mistakes.
5. Collaboration with Lawyers – Work with property lawyers for verification and legal compliance.
6. Use of Technology – Platforms like ArdhiSasa and eCitizen help improve transparency in land records.
When ethics become part of daily operations, clients regain confidence, and the industry thrives.
Why Ethics Is the Future of Real Estate
Kenya’s property market is becoming more digital, competitive, and regulated. Agents who ignore ethics may make quick profits — but they won’t survive long.
Future success will belong to professionals who build trust, uphold transparency, and protect clients’ interests.
Unethical behavior might offer short-term wins, but ethics create lifetime clients, referrals, and sustainable business growth.
Real estate is more than buying and selling — it’s about helping people build homes, investments, and futures. That mission deserves honesty at every step.
Comments
Post a Comment