New board to regulate property firms, agents
Council for Estate Agencies to raise standards, introduce new rules by year-end
By UMA SHANKARI
(SINGAPORE) The Ministry of National Development (MND) will set up a new statutory board to raise the professionalism of the real estate agency industry and better safeguard consumers' interests.
The proposed board - the Council for Estate Agencies (CEA) - will implement a new framework to regulate the industry.
MND will introduce a Bill in Parliament in the second half of this year to set up the board - which will take over the Inland Revenue Authority of Singapore's current role in licensing real estate agencies - and establish the new regulatory framework.
CEA is expected to be operational by year-end. BT has reported that it will be led by Chionh Chye Khye, executive director (designate) with MND.
The setting-up of CEA will lead to more stringent licensing requirements for real estate firms and the mandatory registration of all property agents. New regulations on the conduct of estate agency work and discipline and dispute resolution mechanisms will also be introduced.
Analysts highlighted several criteria proposed under the new regulatory framework - such as mandatory professional indemnity insurance, mandatory continuing professional development of six hours a year, and no dual representation - as positive steps that will help raise professionalism.
'The government is sending a clear signal that in the long haul, stringent entry requirements are needed to be a property agent,' said Tan Tee Khoon, chief executive of industry body Singapore Accredited Estate Agencies (SAEA). 'This will raise the image and professionalism of the industry.'
Institute of Estate Agents (IEA) president Mohamed Ismail said: 'This will definitely shake up the industry - an industry that has long had a reputation of not being regulated.'
The proposed framework comes as the number of complaints against property agents has been rising in recent years. A significant number of these complaints involved HDB transactions, MND said.
MND and other agencies started studying ways to strengthen the regulatory framework in mid-2009.
Under the new framework, real estate agencies will have to satisfy enhanced licensing conditions. Firms must put into place systems and processes to ensure the proper management of business and agents, be covered by professional indemnity insurance and must not be licensed moneylenders or employees of licensed moneylenders.
The principal licensee of an agency, as well as aspiring agents, must also not be an undischarged bankrupt, have a criminal record involving fraud or dishonesty or a track record of complaints or convictions.
'Agencies will also be expected to exercise effective supervision of their agents and take responsibility for their actions,' MND said. To enable agencies to do this effectively, agents will be allowed to contract with only one agency.
Potential agents will also have to meet a set of criteria to be registered - including having at least four GCE O Level passes or the equivalent, passing a new exam and undergoing compulsory continuing professional development.
CEA will be given legislative powers and tools to investigate and discipline agencies and agents that fail to comply with the new regulations and codes. Disciplinary action will include warnings, fines, suspension and even the debarment of agencies and agents. Alleged criminal offences such as fraud and cheating will continue to be referred to police.
Firms and agents will also be required to participate in a dedicated dispute resolution process covering both mediation and adjudication to address consumer complaints.
Last but not least, public education will be stepped up. Among various things, a public registry of real estate agencies and agents will be set up to provide a comprehensive listing of all licensed agencies and registered agents.
The public registry will include any records of disciplinary action taken over the preceding three years or any recognition or award received. Consumers can then check on the particular agency or agent they choose to engage.
'There will be more transparency in an agent's conduct,' said SAEA's Mr Tan. 'Right now, there is no way to do a reference check on any agent you might want to hire.'
But there are worries that there could some teething problems as the new regulations kick in. Auditing the over 20,000 agents in Singapore may present some difficulties, said PropNex corporate communications manager Adam Tan. IEA's Mr Ismail, who is also chief executive of PropNex, said the number of agents could fall within three years.
MND said arrangements will be made to help existing estate agencies and agents switch to the new licensing and registration framework.
For example, they will be exempt from the new minimum four GCE O Level passes or equivalent educational qualification criterion.
Those who have passed an industry examination - such as the Common Examination for House Agents, the Common Examination for Salespersons, the Certified Estate Agents Examination or the National Skills Recognition System - will also not be required to take a new exam. Those who have not passed any existing industry exam will be given one year after the start of the new exam to pass it, and will be given a provisional registration in the meantime.
MND said it will work out further details of the new framework over the next few months.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
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