BT : Property agencies clean-up long overdue

Business Times - 13 May 2010

Property agencies clean-up long overdue

SELDOM has news about an upcoming new statutory board been more welcomed than the announcement that a Council for Estate Agencies is on the cards, even if it's a move that's not so much timely as long overdue.

The new licensing requirements and rules under the new regulatory framework come at a time when the real estate agencies industry is operating in an almost unbridled laissez faire manner - where, with hardly any entry barriers to speak of, any Tom, Dick, housewife, retiree or school-leaver can not only become a housing agent in the red-hot Singapore market but thrive at it, as indeed many have done. Little wonder that the number of property agents here is variously estimated at between 25,000 and 30,000, from some 1,700 agencies, big and small. This is a remarkable figure considering that one would be hard pressed to come up with more than a dozen or so familiar big names among them.

One-person agencies, it would seem, rule the roost. But perhaps for not much longer. Up ahead, prospective agents will have to meet stiffer criteria, including holding at least four GCE O-level passes, passing a new mandatory industry examination, and enrolling in at least six hours of professional training a year. As well, those who want to set up a property agency cannot be undischarged bankrupts, possess criminal records involving fraud or dishonesty, or have previous track records of complaints as agents.

And they can't fleece cash-strapped homebuyers by brandishing a moneylender's licence. Indeed, enterprising entrepreneurs with great aptitude for both moneylending and property-transacting will have to give up their dreams of pursuing this dual-track career, and choose one or the other. And not least, a property agency licensee will need to have professional indemnity insurance to cover financial liabilities. One must wonder: if there are rules and regulations for the marketing and sale of personal financial products (albeit also only after much industry upheaval and public outcry), why has the marketing of property - which typically involves much bigger sums, and which is an individual's biggest investment - been unpoliced for so long?

Yet it remains to be seen if the proposed new regime will be enough to rid the real estate agency industry of its shady side. Insiders are not convinced. As one agency boss sees it, 'a lot of cowboys are still in the industry; the new rules will help improve the industry but will not clean it up'. But individual homebuyers can, and should, also help themselves. Here, the other focus of the council's work, apart from the measures directed at housing agents, is as noteworthy: public education. There will be measures to equip consumers with the knowledge to conduct their property transactions 'prudently and with due diligence', the government says. Indeed, with some effort and legwork, some people surely do it all themselves, thereby sending shoddy or errant housing agents the best notice.

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